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Methanex (MEOH) Q3 Earnings Miss Estimates, Revenues Beat

Zacks Equity Research
·3 min read

Methanex Corporation MEOH logged a loss (attributable to shareholders) of $88 million or $1.15 per share in the third quarter of 2020, wider than a loss of $10 million or 21 cents per share in the year-ago quarter.

Adjusted loss per share (barring one-time items) in the reported quarter was $1.03, which was wider than the Zacks Consensus Estimate of a loss of 94 cents.

Revenues declined 24% year over year to $581 million in the quarter. The results were impacted by lower year-over-year methanol prices. However, it surpassed the Zacks Consensus Estimate of $442 million. The company saw improved global demand for methanol on a sequential comparison basis in the third quarter on the back of a rebound in activities.

Adjusted EBITDA tumbled roughly 56% year over year to $40 million.

 

Methanex Corporation Price, Consensus and EPS Surprise

 

Methanex Corporation Price, Consensus and EPS Surprise
Methanex Corporation Price, Consensus and EPS Surprise

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

 

Operational Highlights

Production in the quarter totaled 1,372,000 tons, down around 25% year over year. Total sales volume was 2,678,000 tons, down roughly 5% year over year.

Average realized price for methanol was $217 per ton in the quarter, down roughly 20% from $272 in the prior-year quarter.

Financials

For the reported quarter, cash flow from operating activities was $35 million, down around 51% year over year. The company had cash and cash equivalents of $1,180.2 million at the end of the quarter, up roughly 38% year over year. Long-term debt was $2,325.7 million, up around 34% year over year.

Outlook

Methanex said that methanol prices have increased leading into the fourth quarter, aided by a strong recovery in methanol demand and reduced industry supply resulting in lower global inventory levels. The company is also in the process of restarting its Chile IV plant on improved global demand for methanol.

Methanex also noted that the path and the pace for global economic recovery and methanol demand remains uncertain given the impacts of both the coronavirus pandemic and challenging commodity prices. It remains focused on preserving liquidity and improving financial flexibility.

Price Performance

Methanex’s shares have lost 23% in the past year compared with the industry’s 0.2% rise.

 

 

 

Zacks Rank & Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and AngloGold Ashanti Limited AU.

Agnico Eagle has a projected earnings growth rate of 102.1% for the current year. The company’s shares have gained around 27% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold has an expected earnings growth rate of 100% for the current year. The company’s shares have surged around 52% in the past year. It currently carries a Zacks Rank #2 (Buy).

AngloGold has a projected earnings growth rate of 137.4% for the current year. The company’s shares have gained roughly 13% in a year. It currently carries a Zacks Rank #2.

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