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LyondellBasell (LYB) Earnings Lag Estimates in Q4, Sales Beat

·5 min read

LyondellBasell Industries N.V. LYB posted profits of $726 million or $2.18 per share in fourth-quarter 2021, down from $855 million or $2.55 in the year-ago quarter.

Adjusted earnings came in at $3.63 per share in the quarter, missing the Zacks Consensus Estimate of $3.85.

Revenues increased 61.6% year over year to $12,830 million in the reported quarter. The figure surpassed the consensus mark of $12,323.1 million.

Consolidated EBITDA in the quarter inched down 1.2% year over year to $1,395 million.

The company witnessed record profitability in 2021 supported by strong demand, tight markets and its recent growth investments. Its Olefins & Polyolefins Americas and Technology segments both posted record annual EBITDA. The profit margins reached all-time highs across many of its businesses, notwithstanding global supply chain constraints and the spread of new COVID variants.

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

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

LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote

Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA increased 74.8% year over year to $1,262 million in the reported quarter. Olefins’ results were driven by an increase in margins partly offset by lower volumes.

The Olefins & Polyolefins — Europe, Asia, the International segment witnessed a decline in EBITDA of 38.2% year over year to $155 million. Olefins results declined about $100 million due to reduced margins and volumes. Margins fell due to higher feedstock and energy costs, partly offset by higher ethylene and propylene prices.

The Advanced Polymer Solutions segment posted an EBITDA of $24 million, down from $152 million in the year-ago quarter. The downside was due to LIFO inventory valuation charges.

EBITDA in the Intermediates and Derivatives segment declined 3.8% on a year-over-year basis to $252 million. Propylene Oxide & Derivatives results increased, driven by improved margins owing to strong Asian demand and market tightness partly offset by high energy costs and lower volumes.

The Refining segment reported a loss of $474 million in the reported quarter against a loss of $72 million in the year-ago quarter.

The Technology segment’s EBITDA was $173 million in the reported quarter, up 284.4% year over year. The upside was due to higher licensing revenue milestones and increased catalyst results.

FY21 Results

Adjusted earnings for full-year 2021 were $18.19 per share compared with earnings of $5.61 a year ago. Net sales rose around 66.4% year over year to $46,173 million.

Financials

At the end of 2021, LyondellBasell had cash and liquid investments of $1.5 billion.

The company repurchased 5.2 million shares in 2021.

Outlook

The company stated that it expects continued strength in demand for products, factoring in above-average GDP growth in 2022.Supply chain disruptions and surges in coronavirus cases have been limiting pent-up consumer demand across the global economy. As vaccinations lead to a more sustainable global reopening and supply chains issues normalize, its businesses should benefit from higher demand for both goods and services, the company noted. It is closely monitoring rising feedstock and energy costs, particularly at its European operations. High levels of ethylene industry maintenance activities scheduled for the first half of 2022 are expected to limit supply.

It expects tight markets for acetyls and propylene oxide to continue to drive strong profitability within its Intermediates and Derivatives segment.

Price Performance

Shares of LyondellBasell have gained 9.9% in the past year compared with 7.3% rise of the industry.

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Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB, Nutrien Ltd. NTR and AdvanSix Inc. ASIX.

Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.3% for the current year. The Zacks Consensus Estimate for ALB's earnings for the current year has been revised 5.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average being 22.1%. ALB has rallied around 26.3% over a year.

Nutrien, sporting a Zacks Rank #1, has a projected earnings growth rate of 53.8% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 17.4% upward in the past 60 days.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 40.9% in a year.

AdvanSix has a projected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 5.3% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average being 46.9%. ASIX has surged 95.3% over a year. ASIX sports a Zacks Rank #1.


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