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Albemarle (ALB) to Post Q1 Earnings: What's in the Offing?

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Albemarle Corporation (ALB - Free Report) will release first-quarter 2020 results after the closing bell on May 6. The impacts of weak global lithium prices and demand softness in China are likely to reflect in its first-quarter results.

The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. In this timeframe, it delivered a positive surprise of around 3.3%, on average.

Albemarle’s shares are down 25.4% over a year compared with a 31.7% decline of the industry it belongs to.


 

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for Albemarle for the to-be-reported quarter stands at $777.9 million, reflecting a decline of 6.5% from the year-ago quarter.

The Zacks Consensus Estimate for net sales for the Lithium unit stands at $244 million, indicating a 19.7% year-over-year drop. The same for the Bromine Specialties segment for the first quarter is pegged at $241 million, reflecting a 3.2% decline on a year-over-year basis.

Moreover, the Zacks Consensus Estimate for net sales for the Catalysts segment is pegged at $245 million, indicating a 2.8% year-over-year decline.

Some Factors to Watch For

Weakness in global lithium pricing is likely to have continued in the first quarter. Albemarle is seeing pricing pressure for both lithium carbonate and hydroxide in specific markets. Lithium prices remain under pressure amid oversupply of the white metal in the market.  As such, the impact of lower prices is expected to get reflected in Lithium segment’s margins in the quarter to be reported.

Moreover, Albemarle is facing some headwinds associated with its Bromine Specialties business. The unit faces challenges from weakness in the automotive market. The coronavirus outbreak is likely to have hurt demand in the automotive market in China in the first quarter.
 

Albemarle Corporation Price and EPS Surprise

 

Albemarle Corporation Price and EPS Surprise

Albemarle Corporation price-eps-surprise | Albemarle Corporation Quote

 

Zacks Model

Our proven model does not conclusively predict an earnings beat for Albemarle this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Albemarle is -11.41%. The Zacks Consensus Estimate for earnings for the first quarter is pegged at 85 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
Zacks Rank:
Albemarle carries a Zacks Rank #4 (Sell).  

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

The Scotts Miracle-Gro Company (SMG - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +1.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wheaton Precious Metals Corp. (WPM - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +0.39% and a Zacks Rank #2.

Domtar Corporation , slated to release earnings on May 8, has an Earnings ESP of +39.81% and a Zacks Rank #3.

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