LyondellBasell's (LYB) Q4 Earnings and Sales Lag Estimates
LyondellBasell Industries N.V. LYB recorded fourth-quarter 2023 profit of $185 million or 56 cents per share, reflecting a fall of roughly 48% from the year-ago quarter's $353 million or $1.07 per share.
LYB posted adjusted earnings of $1.26 per share, down from the year-ago quarter figure of $1.29. It missed the Zacks Consensus Estimate of $1.29.
The company’s net sales in the fourth quarter were $9,929 million, which lagged the Zacks Consensus Estimate of $10,384.4 million. Net sales decreased around 2.7% from $10,206 million in the prior-year quarter.
The company saw a significant reduction in fourth-quarter gasoline crack spreads, positively impacting refining and oxyfuels margins as well as the value of co-product fuels in the Olefins & Polyolefins Americas segment. Steady domestic demand and higher exports were backed by lower ethane raw material costs in the North American polyethylene market. Seasonally slow demand led to reduced operating rates for most businesses in the quarter.
LyondellBasell Industries N.V. Price, Consensus and EPS Surprise
LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote
Segment Highlights
In the Olefins & Polyolefins — Americas division, revenues increased roughly 1.6% year over year to $2,864 million in the reported quarter. This lagged the Zacks Consensus Estimate of $3,076 million.
The Olefins & Polyolefins — Europe, Asia, the international segment recorded revenues of $2,412 million, down from the prior-year quarter levels of $2,523 million. This lagged the Zacks Consensus Estimate of $2,662 million.
The Advanced Polymer Solutions segment posted revenues of $842 million, down around 6.5% from the year-ago quarter. This lagged the Zacks Consensus Estimate of $967 million.
Revenues in the Intermediates and Derivatives segment increased around 3.9% on a year-over-year basis to $2,661 million. This lagged the Zacks Consensus Estimate of $2,914 million.
The Refining segment reported revenues of $2,400 million in the reported quarter, down around 8.8% from the year-ago quarter. This surpassed the Zacks Consensus Estimate of $1,982 million.
The Technology segment’s revenues were $152 million in the reported quarter, up around 4.8% year over year. This lagged the Zacks Consensus Estimate of $156 million.
FY23 Results
Adjusted earnings for full-year 2023 were $8.65 per share compared with $12.46 a year ago. Net sales declined around 18.5% to $41,107 million.
Financials
LyondellBasell generated $4.9 billion in cash from operational activities in 2023. The company maintained a disciplined approach to capital allocation. In 2023, about $1.5 billion was reinvested in the business through capital expenditures, with $1.8 billion returned to shareholders via quarterly dividends and share repurchases.
The company has a strong investment-grade balance sheet, with $7.6 billion in available liquidity at year-end.
Outlook
The company expects seasonally slow demand and economic uncertainty in the first quarter of 2024. Low ethane raw material costs continue to enhance North American Olefins & Polyolefins profits, while regional demand improve modestly. LYB expects oxyfuels and refining margins to be within normal winter seasonal levels.
In China, January demand was sluggish as purchasers controlled their stocks ahead of the Lunar New Year holidays, and growth remained unclear. Seasonal demand is likely to improve in the spring and summer across worldwide markets. LYB aims to run Olefins & Polyolefins Americas assets at around 80%, and Olefins & Polyolefins EAI assets and Intermediates & Derivatives assets at roughly 75%.
Price Performance
Shares of LyondellBasell have lost 1.8% in the past year compared with 20.4% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include, Cameco Corporation CCJ, Carpenter Technology Corporation CRS and Alpha Metallurgical Resources Inc. AMR.
Cameco, carrying a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% in the past 60 days. The stock is up around 66.6% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 23.7% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 144.6% in a year.
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