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Albemarle's (ALB) Earnings and Revenues Beat Estimates in Q4

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Albemarle Corporation (ALB - Free Report) logged a loss of $617.7 million or $5.26 per share in the fourth quarter of 2023. The figure deteriorated from a profit of $1,132.4 million or $9.60 per share a year ago.

Adjusted earnings in the reported quarter came in at $1.85 per share, topping the Zacks Consensus Estimate of 99 cents.

Revenues fell roughly 10.1% year over year to $2,356.2 million in the quarter. However, the metric beat the Zacks Consensus Estimate of $2,289.8 million. The top line was hurt by lower lithium market prices, partly offset by increased volumes in Energy Storage and higher volumes and pricing in Ketjen.

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise

Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Energy Storage unit fell around 15.4% year over year to $1,675.1 million. It beat the consensus estimate of $1,643 million. The decline in sales was attributed to reduced pricing, adjusted for foreign currency effects, driven by the downturn in the lithium market. However, sales volume saw an increase primarily due to the expansion of La Negra III/IV in Chile and higher tolling volumes aimed at satisfying escalating customer needs.

The Specialties segment recorded sales of $339.6 million, down around 16.1% year over year. It was below the consensus estimate of $342 million. Lower volumes and a decline in pricing impacted sales.

The Ketjen unit recorded revenues of $341.5 million in the reported quarter, up roughly 45% year over year. It was above the consensus estimate of $296 million. Higher prices and higher volumes aided sales.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $889.9 million, down around 40% year over year. Long-term debt was around $3,541 million, up around 10% year over year.

FY23 Results

In 2023, Albemarle achieved record net sales of $9.6 billion, surging 31%, with 21% stemming from total volume growth. Energy Storage sales volumes experienced a robust 35% increase, underscoring significant market demand. The company achieved a net income of $1.6 billion, or $13.36 per share, including a pre-tax charge for lower of cost or net realizable value (LCM) and a tax valuation allowance expense in China, both recognized in the fourth quarter. Adjusted EPS stood at $15.22 per share, or $22.25, excluding the LCM charge and the $223 million tax valuation allowance expense.

Outlook

Albemarle anticipates Energy Storage volumes to increase 10-20% in 2024 from 2023 levels.

Albemarle expects net sales for its Specialties segment to range from $1.3-$1.5 billion, with an EBITDA of $270-$300 million. For the Ketjen segment, net sales are projected to be $1-$1.2 billion, with an EBITDA of $130-$150 million.

Capital expenditures for 2024 are estimated to be between $1.6-$1.8 billion, while depreciation and amortization are projected to range from $580-$660 million. The adjusted effective tax rate is expected to be between 27% and 28%, corporate costs between $120-$150 million and interest and financing expenses between $180-$270 million.

Price Performance

Shares of Albemarle have lost 60% in the past year compared with a 21.7% fall of the industry.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Eldorado Gold Corporation (EGO - Free Report) and Hawkins, Inc. (HWKN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 26.5% in the past year.

Eldorado has a projected earnings growth rate of 1,040% for the current year. The Zacks Consensus Estimate for EGO’s current-year earnings has been revised upward by 10% in the past 60 days. EGO topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 496%. The company’s shares have rallied 21% in the past year.

The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied 63.6% in the past year.

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