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Albemarle (ALB) Q1 Earnings Top Estimates on Lithium Strength

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Albemarle Corporation (ALB - Free Report) saw its profits surge in the first quarter of 2018, buoyed by strong gains in its Lithium unit. The chemical maker posted a profit of $131.8 million or $1.18 per share in the quarter, a roughly two-and-a-half fold jump from a profit of $51.2 million or 45 cents per a year ago.

Barring one-time items, adjusted earnings for the reported quarter were $1.30 per share, topping the Zacks Consensus Estimate of $1.20.

Revenues rose around 14% year over year to $821.6 million in the reported quarter. It also topped the Zacks Consensus Estimate of $807 million. Sales in the quarter were aided by favorable pricing and currency impacts and higher sales volumes, mainly in the Lithium division.

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Lithium unit jumped around 38% year over year to $ $298 million in the reported quarter, supported by favorable pricing, higher sales volumes and favorable currency impacts. Adjusted EBITDA climbed roughly 31% year over year to $131 million.

The Bromine Specialties segment raked in sales of $225.6 million, up around 3% year over year, driven by favorable pricing and currency impacts. Adjusted EBITDA was $70 million, up around 2% year over year.

The Catalysts unit reported revenues of $260.7 million in the reported quarter, up roughly 3% year over year. The division’s sales were supported by favorable pricing and positive currency impacts. Adjusted EBITDA was $67.8 million, down roughly 3% year over year.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $692.2 million, down roughly 45% year over year. Long-term debt was $1,436.9 million, up around 3% year over year.

Cash flow from operations was roughly $121.6 million for the first quarter, up 47% year over year, aided by higher earnings in the Lithium unit.

Outlook

Albemarle raised its adjusted earnings per share outlook for 2018. The company now sees adjusted earnings for the year to be in the band of $5.10-$5.40 per share (up from earlier view of $5.00 and $5.40), a year-over-year increase of 11%-18%.

The company continues to envision net sales for 2018 to be between $3.2 billion and $3.4 billion. Adjusted EBITDA has been forecast in the range of $955 million to $1,005 million.

Price Performance

Albemarle’s shares have lost around 8.2% over a year, underperforming the roughly 9.6% gain recorded by its industry.



 

Zacks Rank & Stocks to Consider

Albemarle is a Zacks Rank #3 (Hold) stock.

Better-ranked stocks in the basic materials space include Celanese Corporation (CE - Free Report) , Methanex Corporation (MEOH - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) .

Celanese has an expected long-term earnings growth rate of 8.9% and flaunts a Zacks Rank #1 (Strong Buy). Its shares have gained roughly 26% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have roughly 57% over a year.

Kronos has an expected long-term earnings growth rate of 5% and flaunts a Zacks Rank #2. The company’s shares have moved up around 20% in a year.
 
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