Sociedad Quimica (SQM) Earnings and Sales Lag Estimates in Q3
Sociedad Quimica y Minera de Chile S.A. SQM recorded earnings of $1.68 per share for third-quarter 2023, down from $3.85 in the year-ago quarter. Earnings per share for the reported quarter missed the Zacks Consensus Estimate of $1.98.
The company registered revenues of $1,840.3 million for the quarter, down around 38% year over year. It missed the Zacks Consensus Estimate of $1,958.7 million.
The company’s results were hurt by the lower average sales prices in lithium and fertilizer businesses, partly masked by increased sales volumes and higher iodine sales prices.
Sociedad Quimica y Minera S.A. Price, Consensus and EPS Surprise
Sociedad Quimica y Minera S.A. price-consensus-eps-surprise-chart | Sociedad Quimica y Minera S.A. Quote
Segment Highlights
Revenues from the Lithium and Derivatives segment fell roughly 45% year over year to $1,277.9 million in the reported quarter. Higher sales volumes (up more 4% year over year) were more than offset by lower average sales prices (down around 47% year over year).
The Specialty Plant Nutrients ("SPN") segment raked in revenues of $221.7 million, down around 24% year over year. Sales were hurt by significantly lower average sales prices.
Revenues from the Iodine and Derivatives unit came in at $213 million, down around 1% year over year. Lower sales volumes were partly offset by increased realized sales prices.
Revenues from the Potassium business rose roughly 25% year over year to $75.2 million. Lower average sales prices were more than offset by significantly higher sales volumes.
The Industrial Chemicals unit recorded sales of $43.4 million, down around 4% year over year, impacted by lower sales volumes.
Financials
The company’s cash and cash equivalents were $1,185.4 million, down around 43% on a sequential basis. Long-term debt was $2,476 million, down around 1% sequentially.
Outlook
Moving ahead, SQM expects its sales volumes in the Lithium and Derivatives segment to be similar or lower sequentially in the fourth quarter.
The company has witnessed a modest decline in iodine prices and expects this price trend to continue into the fourth quarter with its realized prices being slightly lower sequentially.
In SPN, the company expects the demand recovery witnessed in the third quarter to continue for the reminder of the year and into 2024. This is expected to result in strong potassium nitrate market demand growth on a year-over-year basis during 2024.
The company also expects its potassium sale volumes to exceed 500,000 metric tons in 2023.
Price Performance
Shares of Sociedad Quimica are down 47.7% over a year compared with the industry’s decline of 30.5%.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
SQM currently has a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation CRS, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.57, indicating year-over-year growth of 213.2%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have surged 63% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Axalta Coating Systems’ current year has been revised upward by 8.2%. AXTA, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 6.7%. The company’s shares have gained 3% in the past year. The company’s shares have gained 21% in the past year.
Andersons currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 8.6% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8%, on average. ANDE shares have rallied around 35% in a year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Andersons, Inc. (ANDE) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
