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What's in Store for Israel Chemicals (ICL) in Q1 Earnings?

Zacks Equity Research

Israel Chemicals Ltd. ICL is slated to release first-quarter 2019 results before the bell on May 7. The company will likely gain from pricing strength across its businesses in the quarter.

Israel Chemicals’ shares are up around 11.8% over a year, outperforming the roughly 5.6% rise recorded by the industry.


Let’s see how things are shaping up for this announcement.

Factors to Consider

Israel Chemicals, in its fourth-quarter call, said that it will remain focused on optimizing its prices and driving margin expansion in 2019. Progress on streamlining its business is also expected to support results this year. The company has also secured several supply agreements for bromine compounds for this year, most of which are with higher prices and stable volumes.

Israel Chemicals gained from higher prices (especially for bromine) across its businesses in the last reported quarter. Higher prices across the bromine and phosphate value chains and increased realized prices for potash boosted its margins. Strict environmental-related regulatory pressure in China contributed to higher prices for bromine and phosphorous-based flame retardants. Potash prices also rose on the back of low availability of product for spot sales.

Pricing strength is expected to continue into the first quarter, lending support to the company sales and margins. However, the company is likely to continue to face higher raw material and transportation costs in the to-be-reported quarter.

Israel Chemicals Shs Price and EPS Surprise


Israel Chemicals Shs Price and EPS Surprise

Israel Chemicals Shs price-eps-surprise | Israel Chemicals Shs Quote

What the Zacks Model Says

Our proven model does not show that Israel Chemicals is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Earnings ESP: Earnings ESP for Israel Chemicals is 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 10 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Israel Chemicals carries a Zacks Rank #2, which when combined with a 0.00% ESP, makes surprise prediction difficult.  

Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some other companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

Intrepid Potash, Inc. IPI has an Earnings ESP of +25.00% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bunge Limited BG has an Earnings ESP of +5.00% and carries a Zacks Rank #3.

Covia Holdings Corporation CVIA has an Earnings ESP of +9.47% and carries a Zacks Rank #3.

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