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Albemarle (ALB) to Report Q2 Earnings: What's in the Cards?

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Albemarle Corporation ALB will release second-quarter 2021 results after the closing bell on Aug 4. The company is likely to have benefited from higher lithium volumes and prices and its cost-reduction actions in the quarter. However, its Catalysts unit is expected to have faced headwinds from the lingering impacts of the winter storm.

The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of 25%, on average. It posted an earnings surprise of 39.2% in the last reported quarter.

Albemarle’s shares are up 147.3% over a year compared with a 39.6% rise of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research



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 $787 million, reflecting an increase of 3% from the year-ago quarter.

The Zacks Consensus Estimate for net sales for the Lithium unit stands at $305 million, indicating a 7.4% year-over-year rise. The same for the Bromine Specialties segment for the second quarter is pegged at $249 million, reflecting an 6.9% increase on a year-over-year basis.

Moreover, the Zacks Consensus Estimate for net sales for the Catalysts segment is pinned at $198 million, flat year over year.

Some Factors to Watch For

Albemarle is likely to have benefited from higher volumes in its lithium business in the second quarter on continued recovery in global economic activities. Healthy customer orders and plant productivity improvements are like to have supported volumes. An uptick in lithium prices amid tighter market conditions is also expected to have aided its performance.

Benefits of the company’s cost-saving initiatives are also expected to get reflected in the quarter to be reported. The company remains on track with its cost-saving program which is expected to deliver run rate savings of more than $120 million by the end of 2021. Its cost actions are expected to have supported margins in the second quarter.

The company’s Bromine Specialties unit is also expected to have benefited from strong demand across the portfolio as well as cost-saving and pricing initiatives in the to-be-reported quarter.

However, its Catalysts unit is likely to have faced headwind from weak fluid catalytic cracking (FCC) volumes resulting from the lingering impact of the winter storm Uri. Delays in FCC orders are expected to have affected volumes in the June quarter. Some impact of lost production volumes due to the winter storm are also expected to reflect in Bromine Specialties results. The company is also likely to have faced headwind raw material cost inflation in the second quarter.

Albemarle Corporation Price and EPS Surprise

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 -7.95%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at 83 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Albemarle currently carries a Zacks Rank #3.

Stocks That Warrant a Look

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:

Westlake Chemical Corporation WLK scheduled to release earnings on Aug 3, has an Earnings ESP of +1.50% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

DuPont de Nemours, Inc. DD, scheduled to release earnings on Aug 3, has an Earnings ESP of +3.81% and carries a Zacks Rank #3.

Olympic Steel, Inc. ZEUS, scheduled to release earnings on Aug 5, has an Earnings ESP of +31.84% and sports a Zacks Rank #1.


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Westlake Chemical Corporation (WLK) : Free Stock Analysis Report

DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report

Albemarle Corporation (ALB) : Free Stock Analysis Report

Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report

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