A month has gone by since the last earnings report for Methanex (MEOH Quick QuoteMEOH - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Methanex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Methanex's Q1 Earnings & Revenues Surpass Estimates

Methanex logged a first-quarter 2024 profit (attributable to shareholders) of $53 million or 77 cents per share, down from $60 million or 87 cents per share in the year-ago quarter.

Adjusted earnings per share (barring one-time items) in the reported quarter were 65 cents, topping the Zacks Consensus Estimate of 30 cents.

Revenues fell roughly 11.8% year over year to $916 million in the quarter. The top line beat the Zacks Consensus Estimate of $908.5 million.

Adjusted EBITDA in the reported quarter fell around 23.4% year over year to $160 million. The results were hurt by lower year-over-year average realized prices.

Operational Highlights

Production in the quarter totaled 1,721,000 tons, up 3.7% year over year, below our estimate of 1,994,000 tons. Production was, however, lower than the prior quarter, owing primarily to reduced production in New Zealand, which was slightly offset by increased production in Egypt.

Total sales volume in the first quarter totaled 2,670,000 tons, down 4.8% year over year. The figure is above our estimate of 2,628,000 tons.

The average realized price for methanol was $343 per ton in the quarter, down from $371 per ton in the prior-year quarter. The figure is below our estimate of $349 per ton.

Financials

Cash and cash equivalents were $407 million at the end of the quarter. Cash flow from operating activities was $91 million in the quarter.

The company returned $12.5 million to shareholders through dividends in the reported quarter.

Outlook

Methanex expects production for 2024 to be roughly 7 million tons. The company's production projection for the year has been reduced principally due to the Geismar 3 start-up delay. This predicted production estimate is based on the midpoint of Chile and New Zealand production guidance, with G3 starting up in the third quarter and working at full rates in the fourth quarter, the restart of Egypt in the first half of February and all other plants functioning at full capacity. Quarterly production may vary depending on turnaround timing, gas supply, unforeseen outages and unanticipated events.


 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -11.19% due to these changes.

VGM Scores

At this time, Methanex has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.