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Yahoo Finance Plus Albemarle (ALB) Q3 Earnings Surpass Estimates, Revenues Lag
Albemarle Corporation ALB logged a profit of $897.2 million or $7.61 per share in the third quarter of 2022 compared with a loss of $392.8 million or $3.36 per share a year ago.
Adjusted earnings in the reported quarter were $7.50 per share, topping the Zacks Consensus Estimate of $6.84.
Revenues climbed roughly 152% year over year to $2,091.8 million in the quarter, However, it trailed the Zacks Consensus Estimate of $2,118 million. The top line was driven by higher pricing on the back of strong demand from diverse end markets.
Albemarle Corporation Price, Consensus and EPS Surprise
Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote
Segment Highlights
Sales from the Lithium unit surged 318% year over year to $1,501.1 million. Sales were driven by higher pricing (up 298% net of currency) associated with renegotiated contracts and higher market pricing. Volumes rose 20% in the quarter on the back of the La Negra III/IV expansion in Chile and increased tolling volumes to meet rising customer demand.
The Bromine Specialties segment recorded sales of $354.9 million, up 28% year over year. Sales were supported by an 18% (net of currency) rise in pricing and 10% higher volume. Tight market conditions led to strong demand and favorable pricing.
The Catalysts unit recorded revenues of $235.8 million in the reported quarter, up 22% year over year. Volumes rose 17% while pricing increased 5% (net of currency).
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $1,382.8 million, up around 132% year over year. Long-term debt was $3,118.8 million, up around 54% year over year.
Cash flow from operations was $955.6 million for the nine months ended Sep 30, 2022, up around 95% year over year.
Outlook
Albemarle tightened its net sales guidance for 2022 to the band of $7.1-$7.4 billion. It sees strength in lithium pricing and end markets to offset modestly lower expectations due to bromine-related softness in major end markets, including consumer and industrial electronics and building & construction. Adjusted EBITDA for the year is now forecast to be $3.3-$3.5 billion.
Albemarle also sees adjusted earnings per share for 2022 in the band of $19.75-$21.75, compared with $19.25-$22.25 it expected earlier.
The company anticipates capital expenditures of $1.3-1.4 billion for 2022. Net cash from operations is projected to be $1.45-$1.65 billion. The company also expects to be free cash flow positive in 2022.
Price Performance
Shares of Albemarle are down 2.3% in the past year compared with a 14.3% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Albemarle currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. SQM, Ryerson Holding Corporation RYI and Reliance Steel & Aluminum Co. RS.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 38% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 15% over a year.
Reliance Steel, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.
Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 24% in a year.
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