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Methanex (MEOH) Q3 Earnings Miss, Revenues Beat Estimates

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Methanex Corporation (MEOH - Free Report) slipped to loss (attributable to shareholders) of $10 million or 21 cents per share in the third quarter of 2019 from profit of $128 million or $1.61 per share in the year-ago quarter.  

Adjusted loss per share (barring one-time items) in the reported quarter was 27 cents. The Zacks Consensus Estimate for the quarter was pegged at breakeven.

Revenues declined around 37.7% year over year to $649.7 million in the quarter. However, it surpassed the Zacks Consensus Estimate of $632 million.

Adjusted EBITDA tumbled 69.3% year over year to $90 million. This resulted from a decrease in methanol prices, which was partly offset by higher sales volume of methanol produced by Methanex.

Methanex Corporation Price, Consensus and EPS Surprise

 

Operational Highlights

Production in the quarter totaled 1,837,000 tons, up 5.8% year over year. Total sales volume was 2,824,000 tons, down 1.6% year over year.

Average realized price for methanol was $272 per ton in the quarter, down 34.1% from $413 in the prior-year quarter.

Financials

For the reported quarter, cash flow from operating activities was $71 million, down 68.9% year over year. The company had cash and cash equivalents of $857 million, up around 69.6% year over year.

Methanex returned $27 million to shareholders through regular dividend payouts during the third quarter.

Outlook

The company anticipates its Geismar 3 plant to deliver strong returns on significant capital and operating cost advantages. Over the coming years, most of the large-scale capacity additions are anticipated to be in the Americas and the Middle East. Further, the company expects new non-integrated capacity additions in China to be modest on continuous restrictions by the government in China.

Price Performance

Shares of the company have lost 41.4% in the past year compared with the industry’s 27.8% decline.

 

 

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation(KGC - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Kirkland Lake Gold Ltd.(KL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 210% for 2019. The company’s shares have surged 76.4% in the past year.

Franco-Nevada has a projected earnings growth rate of 39.3% for 2019. The company’s shares have rallied 48.8% in a year.

Kirkland Lake Gold has an estimated earnings growth rate of 93.4% for the current year. Its shares have moved up 132% in the past year.

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