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LyondellBasell (LYB) Beats Earnings & Revenue Estimates in Q3

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LyondellBasell (LYB) Beats Earnings & Revenue Estimates in Q3

LyondellBasell (LYB) looks to capture value with expanded access to markets and incremental synergies from the integration of A. Schulman acquisition.

LyondellBasell Industries N.V.’s LYB net profits rose 5.4% year over year to $1,113 million or $2.85 per share in third-quarter 2018 from $1,056 million or $2.67 in the prior-year quarter.

Barring one-time items, adjusted earnings came in at $2.96 per share, which surpassed the Zacks Consensus Estimate of $2.73.

The company posted revenues of $10,155 million, up roughly 19.2% year over year. The figure beat the Zacks Consensus Estimate of $9,564 million.
Consolidated EBITDA declined around 5% year over year to $1,732 million.

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise

 

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise | LyondellBasell Industries N.V. Quote

 

Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA increased around 19.1% year over year to $704 million. Olefin results increased by $30 million year over year. Polyolefins results increased around $100 million, mainly driven by polyethylene and polypropylene spread improvements.

The Olefins & Polyolefins — Europe, Asia, International segment witnessed a decline in EBITDA of around 55.6% year over year to $262 million. Olefin results fell roughly $100 million on a year-over-year basis. Consolidated polyolefins results declined around $110 million. Polyolefin spreads and sales volumes declined due to strong volumes in the year-ago quarter.

The Advanced Polymer Solutions (APS) segment saw a fall in EBITDA of around 43.5% year over year to $70 million. The addition of product lines from the A. Schulman acquisition partly offset margin and volume declines in polypropylene compounds.
 
EBITDA in the Intermediates and Derivatives segment went up around 25.3% on a year-over-year basis to $504 million. The same at the Refining segment totaled $84 million, up 45%. Crude throughput fell 8,000 barrels per day with planned maintenance in the quarter under review.

The Technology segment’s EBITDA surged 109% year over year to $98 million.

Financials

As of Sep 30, 2018, LyondellBasell had cash and liquid investments of $2 billion.

LyondellBasell repurchased 3.2 million shares with 387 million shares outstanding as of Sep 30, 2018. The company paid dividend worth $389 million in the third quarter.

Outlook

LyondellBasell expects to drive operational and business improvements in Refining, Technology and Intermediates and Derivatives businesses in the fourth quarter. The company said that it is well-positioned to capture value with expanded access to markets, incremental synergies from the integration of A. Schulman acquisition and the formation of the Advanced Polymer Solutions segment.
 
Price Performance

Shares of LyondellBasell have lost around 20.2% over the past three months compared with the industry’s fall of 18.3%.

 



Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. CF, KMG Chemicals, Inc. KMG and The Mosaic Company MOS.
 
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 16.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5% and a Zacks Rank #1. Its shares have risen 35.6% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 7% and a Zacks Rank #2 (Buy). The company’s shares have rallied 33.5% in the past year.

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