Methanex Corporation (MEOH) announced that it will temporarily idle its joint venture operation, Egyptian Methanex Methanol Company S.A.E. (EMethanex), in which it owns 50% stake, due to gas availability. The plant has the capacity to produce 1.3 million tons of methanol per year, and is located in Damietta, Egypt on the Mediterranean Sea.
Methanex’s shares went down as much as around 3% in the trading session following the news.
Another shareholder in EMethanex informed Methanex that the latter will not be able to resume operations at the plant before end-Jul 2014 as the available natural gas will be allotted to meet peak summer electricity demand. The plant had been temporarily shut down in June with the expectation of resuming soon. However, due to ongoing gas constraints mostly related to increased seasonal electricity demand, the shut down has been extended.
Methanex released its first-quarter 2014 results in Apr 2014. The company saw its profit zoom in the quarter as higher methanol pricing and increased production resulting from its capacity expansion measures boosted the bottom line. However, the company's shares dropped as its earnings missed expectations.
Methanex posted earnings of $1.50 per share in the quarter, a more than two-fold surge from 63 cents per share logged a year-ago. Profit jumped 142% to $145 million from $60 million in the prior year. Earnings per share, however, fell well short of the Zacks Consensus Estimates of $1.84.
Revenues shot up roughly 48% year over year to $968 million in the reported quarter on better pricing and higher methanol sales volumes, backed by healthy demand. However, it missed the Zacks Consensus Estimate of $1,003 million.
Methanex is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical space worth considering include Compass Minerals International Inc. (CMP), PetroLogistics LP (PDH) and Celanese Corp. (CE). While both Compass Minerals and PetroLogistics sport a Zacks Rank #1 (Strong Buy), Celanese carries a Zacks Rank #2 (Buy).