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LyondellBasell (LYB) to Post Q3 Earnings: Is a Beat in Store?

Zacks Equity Research

LyondellBasell Industries N.V. LYB is set to release third-quarter 2019 results before the opening bell on Nov 1.

The company’s third-quarter performance is likely to have benefited from low-cost natural gas liquid feedstocks and the A. Schulman acquisition.

The stock has gained 10.2% year to date against the 20.7% decline of the industry.

What the Zacks Model Says

Our proven model predicts an earnings beat for LyondellBasell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat. That is the case here, as you will see below:

Earnings ESP: Earnings ESP for LyondellBasell is +1.26%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at $2.82 and $2.78, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LyondellBasell currently carries a Zacks Rank #3.

LyondellBasell Industries N.V. Price and EPS Surprise


LyondellBasell Industries N.V. Price and EPS Surprise

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


Factors at Play in Q3

In August 2019, the company stated that its integration with A. Schulman is progressing well. It captured cost synergies at an annual rate of roughly $100 million in the second quarter. The A. Schulman acquisition is likely to have contributed to the company’s third-quarter results.  

Moreover, the company expects volumes to remain stable in the third quarter. It also expects some potential for seasonal demand improvement.

The company’s oxyfuels margins are also expected to have remained strong during the third quarter. LyondellBasell expects minimal or no impact on third-quarter results from the fire incident in March 2019 at the third-party terminal on the Houston Ship Channel.   

Also, the benefits of low-cost natural gas liquid feedstocks are likely to get reflected in LyondellBasell’s O&P–Americas and Oxyfuels units as well as Related Products business in the third quarter.

The Zacks Consensus Estimate for third-quarter consolidated sales is pegged at $8,983 million, which indicates a decline of 11.5% year over year.

Other Stocks Poised to Beat Estimates

Here are some other companies in the basic materials space you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:

Franco-Nevada Corporation FNV has an Earnings ESP of +0.34% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross Gold Corporation KGC has an Earnings ESP of +2.50% and flaunts a Zacks Rank #1.

Sandstorm Gold Ltd. SAND has an Earnings ESP of +12.50% and flaunts a Zacks Rank #1.

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