Albemarle Corporation (ALB - Free Report) recorded a profit of $90.4 million or 85 cents per share in the fourth quarter of 2019, down around 30% from $129.6 million or $1.21 per share it earned year ago.
Adjusted earnings for the reported quarter were $1.73 per share, up roughly 13% year over year. It lagged the Zacks Consensus Estimate of $1.75.
Revenues rose around 8% year over year to $992.6 million in the quarter. It, however, missed the Zacks Consensus Estimate of $1,001 million. Revenues were aided by higher volumes in the Lithium unit and favorable pricing in Bromine Specialties and Catalysts segments.
Sales from the Lithium unit climbed around 20% year over year to $411.1 million in the reported quarter, aided by favorable sales volumes. Pricing was flat in the quarter. Adjusted EBITDA was down roughly 3% year over year to $140.1 million.
The Bromine Specialties segment recorded sales of $243.5 million, up around 2% year over year, supported by favorable pricing and product mix. Adjusted EBITDA was $79.7 million, up around 14% year over year.
The Catalysts unit recorded revenues of $282.5 million in the reported quarter, down roughly 7% year over year. Adjusted EBITDA was $76.7 million, down roughly 3% year over year. The company saw lower sales in Clean Fuel Technology as well as Fluid Catalytic Cracking (“FCC”) due to delays in the start-up of new FCC units.
Earnings for 2019 were $5.02 per share, down from $6.34 per share a year ago.
Revenues were $3.6 billion for the full year, up around 6% year over year.
Albemarle ended 2019 with cash and cash equivalents of roughly $613.1 million, up roughly 10% year over year. Long-term debt doubled year over year to around $2,862.9 million.
Cash flow from operations was $719.4 million for 2019, up around 32% year over year. Capital expenditures were $851.8 million for the year, up 22% year over year.
Albemarle envisions its results in 2020 to be lower on a year-over-year basis factoring in lower expected results from the Lithium segment and flat-to-modestly lower results from the Bromine Specialties unit, partly offset by flat-to-slightly higher results from the Catalysts division.
The company expects net sales for 2020 to be between $3.48 billion and $3.53 billion, representing 2-3% year over year decline. Moreover, Albemarle sees adjusted earnings for 2020 in the band of $4.80-$5.10 per share, a year-over-year drop of 16-21%.
Adjusted EBITDA for the year has been forecast in the range of $880-$930 million, representing 10-15% year over year decline.
The company also expects its cost-reduction program to deliver run-rate savings of more than $100 million by the end of 2021.
Albemarle’s shares are up 7.8% over a year compared with the roughly 29.6% decline recorded by its industry.
Zacks Rank & Key Picks
Albemarle currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space include Daqo New Energy Corp. (DQ - Free Report) , NovaGold Resources Inc. (NG - Free Report) and Sandstorm Gold Ltd. (SAND - Free Report) .
Daqo New Energy has projected earnings growth rate of 353.7% for 2020 and sports a Zacks Rank #1 (Strong Buy). The company’s shares have surged roughly 131% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.
NovaGold has projected earnings growth rate of 11.1% for the current fiscal and carries a Zacks Rank #2 (Buy). The company’s shares have surged around 148% over a year.
Sandstorm Gold has estimated earnings growth rate of 66.7% for 2020 and carries a Zacks Rank #2. The company’s shares have shot up roughly 28% in a year’s time.
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