Albemarle Corporation ALB recorded a profit of $155.1 million or $1.46 per share in the third quarter of 2019, up around 20% from $129.7 million or $1.20 per share it earned year ago.
The bottom line in the reported quarter was boosted by higher earnings across the company’s businesses, reduced interest and financing expenses as well as a lower effective tax rate.
Adjusted earnings for the reported quarter were $1.53 per share, up roughly 17% year over year. It trounced the Zacks Consensus Estimate of $1.49.
Revenues rose around 13% year over year to $879.7 million in the quarter. It, however, missed the Zacks Consensus Estimate of $899 million. Revenues were aided by higher volumes across the board and favorable pricing across Lithium and Bromine Specialties units.
Albemarle Corporation Price, Consensus and EPS Surprise
Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote
Sales from the Lithium unit went up around 22% year over year to $330.4 million in the reported quarter, aided by favorable pricing and higher sales volumes, partly offset by deferred shipments due to the impact of Typhoon Tapah. Adjusted EBITDA was up 12% year over year to $127.5 million.
The Bromine Specialties segment logged sales of $256.3 million, up around 10% year over year, driven by favorable pricing and higher volumes. Adjusted EBITDA was $88.8 million, up around 13% year over year.
The Catalysts unit recorded revenues of $261.3 million in the reported quarter, up roughly 4% year over year. Adjusted EBITDA was $66.9 million, up roughly 7% year over year. Favorable pricing in Fluid Catalytic Cracking (FCC) catalysts was offset by reduced volumes due to delays in the start-up of new FCC units.
Albemarle ended the quarter with cash and cash equivalents of roughly $317.8 million, down roughly 50% year over year. Long-term debt was around $1,382 million, down around 2% year over year.
Cash flow from operations was $345.6 million for the first nine months of 2019, down around 8% year over year. Capital expenditures were $608.5 million for the period, up 29% year over year.
Albemarle backed its earnings outlook for 2019 which it had provided last month. It continues to see adjusted earnings for 2019 in the band of $6.00-$6.20 per share, a year-over-year increase of 10-14%.
The company expects net sales for 2019 to be between $3.6 billion and $3.7 billion, representing 7-10% year over year growth. Moreover, Albemarle sees adjusted EBITDA for the year in the range of $1.02-$1.06 billion, representing 2-6% year over year growth.
The company also initiated a cost management program which it expects to deliver more than $100 million in savings over a two-year period.
Albemarle’s shares are down around 13.5% so far this year compared with the roughly 16.3% decline recorded by its industry.
Zacks Rank & Key Picks
Albemarle currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines Limited AEM, Kinross Gold Corporation KGC and Franco-Nevada Corporation FNV, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle has a projected earnings growth rate of 168.6% for the current year. The company’s shares have rallied 68% in a year’s time.
Kinross has projected earnings growth rate of 210% for the current year. The company’s shares have surged around 81% in a year’s time.
Franco-Nevada has estimated earnings growth rate of 39.3% for the current year. The company’s shares have gained roughly 48% in a year’s time.
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