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Albemarle's (ALB) Q1 Earnings Top Estimates, Revenues Lag

Albemarle Corporation ALB recorded a profit of $107.2 million or $1.01 per share in the first quarter of 2020, down around 20% from $133.6 million or $1.26 per share it earned a year ago.

Adjusted earnings for the reported quarter were $1.00 per share, down from $1.23 a year ago. It topped the Zacks Consensus Estimate of 85 cents.

Revenues fell roughly 11% year over year to $738.8 million in the quarter. It missed the Zacks Consensus Estimate of $777.9 million. The company saw lower sales across its segments in the quarter.

Albemarle Corporation Price, Consensus and EPS Surprise

 

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

Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Lithium unit dropped around 19% year over year to $236.8 million in the reported quarter, hurt by lower sales volumes and pricing. Adjusted EBITDA was down roughly 32% year over year to $78.6 million.

The Bromine Specialties segment recorded sales of $231.6 million, down 7% year over year. Reduced volumes due to logistics challenges more than offset higher pricing. Adjusted EBITDA was $83.3 million, up around 6% year over year.

The Catalysts unit recorded revenues of $207.2 million in the reported quarter, down roughly 18% year over year, hurt by lower volumes. Adjusted EBITDA was $47.5 million, down roughly 21% year over year. The company saw lower volumes in Fluid Catalytic Cracking (“FCC”) due to reduced transportation fuel consumption.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $553.2 million, up roughly 19% year over year. Long-term debt more than doubled year over year to around $3,105.2 million.

Cash flow from operations was $155 million for the quarter, up nearly three fold year over year. Capital expenditures were $214.5 million for the quarter.

Outlook

Albemarle has withdrawn its guidance for full-year 2020 due to uncertainties around the duration and economic impacts of the coronavirus pandemic. For the second quarter of 2020, the company expects its performance to be lower year-over-year based on lower global economic activities resulting from the pandemic.

The company expects net sales for the second quarter to be between $700 million and $775 million. Moreover, adjusted EBITDA for the quarter has been forecast in the range of $140-$190 million.

The company is also accelerating its $100 million cost savings program and expects to realize $50-$70 million of savings this year.

Price Performance

Albemarle’s shares are down 23.7% over a year compared with a 30.2% decline of its industry.



 

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth considering in the basic materials space are The Scotts Miracle-Gro Company SMG, Franco-Nevada Corporation FNV and Newmont Corporation NEM.

Scotts Miracle-Gro has an expected earnings growth rate of 15.9% for the current fiscal year. The company’s shares have gained roughly 45% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 22% for the current year. It currently carries a Zacks Rank #2 (Buy). The company’s shares have surged roughly 101% in a year.

Newmont has a projected earnings growth rate of 95.5% for the current year. The company’s shares have rallied around 103% in a year. It currently has a Zacks Rank #2.

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Newmont Corporation (NEM) : Free Stock Analysis Report
 
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
 
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The Scotts MiracleGro Company (SMG) : Free Stock Analysis Report
 
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