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Albemarle's (ALB) Earnings & Revenues Top Estimates in Q1

Zacks Equity Research

Albemarle Corporation ALB recorded a profit of $133.6 million or $1.26 per share in the first quarter of 2019, up from $131.8 million or $1.18 per share it earned year ago. The bottom line in the reported quarter was aided by earnings growth in the company’s Bromine Specialties segment.

Adjusted earnings for the reported quarter were $1.23 per share, topping the Zacks Consensus Estimate of $1.21.

Revenues rose around 1% year over year to $832.1 million in the quarter. It also surpassed the Zacks Consensus Estimate of $807.8 million.

Revenues were aided by favorable pricing across the board and higher sales volume across Bromine Specialties and Catalysts segments, offset by lower sales volume in the Lithium unit and the impact of the divestment of the polyolefin catalysts and components portion of the Performance Catalyst Solutions business.

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise | Albemarle Corporation Quote

Segment Highlights

Sales from the Lithium unit fell around 2% year over year to $291.9 million in the reported quarter as lower sales volume due to rain in Chile and unfavorable currency impact more than offset favorable pricing. Adjusted EBITDA dropped roughly 12% year over year to $115.6 million, hurt by higher costs of goods sold and lower volumes.

The Bromine Specialties segment logged sales of $249.1 million, up around 10% year over year, driven by favorable pricing and higher volumes. Adjusted EBITDA was $78.6 million, up around 12% year over year.

The Catalysts unit recorded revenues of $251.6 million in the reported quarter, down roughly 4% year over year, impacted by the polyolefin catalysts divestiture and unfavorable currency swings. Adjusted EBITDA was $60.1 million, down roughly 11% year over year.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $465.3 million, down roughly 33% year over year. Long-term debt was $1,393.9 million, down around 3% year over year.

Cash flow from operations was $54.9 million for the quarter, down around 18% year over year. Capital expenditures were $216.1 million.

Outlook

The company reaffirmed its outlook for 2019. It continues to see adjusted earnings for 2019 in the band of $6.10-$6.50 per share, a year-over-year increase of 11-19%.

The company also backed its net sales guidance for 2019 of between $3.65 billion and $3.85 billion, representing 8-14% year over year growth.  Adjusted EBITDA for the year has been forecast in the range of $1,070 million to $1,140 million, representing 6-13% year over year growth.

Price Performance

Albemarle’s shares are down around 5.8% so far this year compared with the roughly 10.1% decline recorded by its industry.



 

Zacks Rank and Stocks to Consider

Albemarle currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include AngloGold Ashanti Limited AU, Flexible Solutions International Inc. FSI and Air Products and Chemicals, Inc. APD.

AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have shot up around 30% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 106% in the past year.

Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have gained around 24% in the past year.

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