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LyondellBasell's (LYB) Q1 Earnings Beat, Sales Lag Estimates

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LyondellBasell Industries N.V. (LYB - Free Report) posted profits of $144 million or 42 cents per share in first-quarter 2020, down from $817 million or $2.19 in the year-ago quarter.

Barring one-time items, adjusted earnings came in at $1.47 per share that beat the Zacks Consensus Estimate of $1.36.

Revenues fell 14.6% year over year to $7,494 million in the reported quarter. The figure also trailed the consensus mark of $7,507.2 million.

Consolidated EBITDA fell 54.8% year over year to $646 million.

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise


LyondellBasell Industries N.V. Price, Consensus and EPS Surprise

LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote


Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA fell 29.1% year over year to $366 million. Polyolefin results dropped around $110 million due to lower margins, partly offset by higher polyethylene volume.

The Olefins & Polyolefins — Europe, Asia, International segment witnessed a fall in EBITDA of 36.1% year over year to $189 million. Olefin results rose around $45 million on a year-over-year basis with an improvement in both volume and margin. Ethylene margin expanded mainly due to lower feedstock prices, which was partly offset by decline in ethylene prices.

The Advanced Polymer Solutions (APS) segment saw a decline in EBITDA to $113 million from $148 million in the year-ago quarter. Compounding & Solutions results declined $30 million mainly due to lower demand stemming from persistently low automotive demand and the impact of coronavirus.

EBITDA in the Intermediates and Derivatives segment fell 47.9% on a year-over-year basis to $203 million.  

EBITDA in the Refining segment came in at a loss of $272 million in the reported quarter compared with a loss of $15 million in the year-ago quarter.  Margin declined due to the inability to upgrade products during an unplanned outage.  Crude throughput fell by 33,000 barrels per day.

The Technology segment’s EBITDA fell to $56 million in the reported quarter from $83 million in the prior-year quarter, mainly due to lower licensing revenues.


As of Mar 31, LyondellBasell had cash and liquid investments of $1.8 billion.

In the first quarter, the company paid out dividends worth $351 million. It also had 334 million common shares outstanding as of Mar 31.


LyondellBasell expects low crude oil pricing, the coronavirus pandemic and a slowing economy to affect its business in the second quarter. The company’s order books for April and May indicate strong ongoing demand for its polyolefins in medical and consumer packaging applications. Demand for industrial and durable products markets are expected to remain weak. Moreover, significantly lower demand for transportation fuels will impact the Refining and Oxyfuels & Related Products businesses.

The company is undertaking actions to manage risk by accelerating cost-saving initiatives, aggressively managing working capital and lowering capital expenditures for 2020 by $500 million. It also increased liquidity to more than $5 billion during April.

Price Performance

Shares of LyondellBasell have lost 32.6% in the past year compared with the industry’s 27.2% decline.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 96.2% in the past year.

Barrick has an expected earnings growth rate of 60.8% for 2020. Its shares have returned 104.3% in the past year.    

Franco-Nevada has an expected earnings growth rate of 19.2% for 2020. The company’s shares have surged 87% in the past year.

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