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Sociedad Quimica (SQM) Q2 Earnings Lag Estimates, Sales Beat

·4 min read

Sociedad Quimica y Minera de Chile S.A. SQM recorded a profit of $859.3 million or $3.01 per share for second-quarter 2022, up from $89.8 million 31 cents in the year-ago quarter. Earnings per share for the reported quarter missed the Zacks Consensus Estimate of $3.24.

The company registered revenues of $2,598.8 million for the quarter, up more than fourfold year over year. It surpassed the Zacks Consensus Estimate of $2,367.7 million.  The company gained from a significant increase in lithium prices in the reported quarter.

 

Sociedad Quimica y Minera S.A. Price, Consensus and EPS Surprise

 

Sociedad Quimica y Minera S.A. Price, Consensus and EPS Surprise
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 surged more than elevenfold year over year to $1,846.6 million in the reported quarter. The upside was driven by strong lithium sales volumes and significantly higher prices.

The Specialty Plant Nutrients (SPN) segment raked in revenues of $330.3 million, up around 52% year over year. The upside was driven by higher prices of all fertilizers.

Revenues from the Iodine and Derivatives unit came in at $174.2 million, up around 41% year over year. The segment benefited from higher sales volumes as well as higher average prices.

Revenues from the Potassium Chloride and Potassium Sulfate business jumped more than threefold year over year to $182.4 million. Sales were driven by record prices in the potassium chloride market.

The Industrial Chemicals unit recorded sales of $59 million, up more than threefold year over year, aided by higher sales volumes.

Financials

The company’s cash and cash equivalents were $1,946.4 million at the end of the quarter, up around 57% on a year-over-year basis. Long-term debt was $2,173.5 million, up around 14% year over year.

Outlook

Moving ahead, the company envisions lithium demand to grow at least 35% in 2022. It expects sales volumes to reach at least 145,000 metric tons this year. It expects lithium sales volumes to continue to rise in the upcoming quarters.

In SPN, the company expects demand in agricultural potassium nitrate market to decline roughly 10% year over year in 2022 due to historically high prices. As such, it expects sales volumes to be lower year over year in 2022.

In Iodine and Derivatives, the company expects significantly higher average prices on a year-over-year basis this year. It also sees average prices in the potassium chloride market to decline in the balance of 2022 compared to the second-quarter level.

Price Performance

Shares of Sociedad Quimica are up 96.2% over a year compared with the industry’s rise of 69.7%.

 

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Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

Sociedad Quimica currently sports a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation ALB, Daqo New Energy Corp. DQ and The Chemours Company CC.

Albemarle has a projected earnings growth rate of 405.2% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 61.3% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 30% in a year and currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 177.5% for the current year. The consensus estimate for DQ's earnings for the current fiscal has been revised 20.8% upward in the past 60 days.

Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 45% over a year.

Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC’s current-year earnings has been revised 7.3% upward in the past 60 days.

Chemours’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 28.3%. CC has gained roughly 19% in a year. The company has a Zacks Rank #2 (Buy).


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