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Albemarle's (ALB) Q1 Earnings Top Estimates, Revenues Miss

Albemarle Corporation ALB logged a profit of $1,238.6 million or $10.51 per share in the first quarter of 2023, up from a profit of $253.4 million or $2.15 per share a year ago.

Adjusted earnings in the reported quarter were $10.32 per share, topping the Zacks Consensus Estimate of $6.93.

Revenues climbed roughly 129% year over year to $2,580.3 million in the quarter, However, it trailed the Zacks Consensus Estimate of $2,736.5 million. The top line was driven by higher lithium pricing and increased volumes.

 

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise
Albemarle Corporation Price, Consensus and EPS Surprise

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

 

Segment Highlights

Sales from the Energy Storage unit surged 319% year over year to $1,943.7 million. Sales were driven by higher pricing (up 301% net of currency) associated with renegotiated contracts and higher market pricing. Volumes rose 18% in the quarter on the back of the La Negra III/IV expansion in Chile and increased tolling volumes to meet rising customer demand.

The Specialties segment recorded sales of $418.8 million, down around 6% year over year. Sales were impacted by 15% lower volumes, partly offset by a 9% (net of currency) rise in pricing.

The Ketjen unit recorded revenues of $217.8 million in the reported quarter, flat year over year. Volumes fell 12% while pricing increased 12% (net of currency).

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $1,586.7 million, up more than three-fold year over year. Long-term debt was around $3,233.4 million, up around 62% year over year.

Cash flow from operations was $721 million for the quarter, up more than three-fold year over year.

Outlook

Albemarle now expects net sales in the band of $9.8-$11.5 billion for 2023 compared with $11.3-$12.9 billion expected earlier. It sees continued global shift to electric vehicles to drive a 35-55% year-over-year rise in net sales in 2023. Adjusted EBITDA for the year is now forecast to be $3.3-$4 billion, compared with $4.2-$5.1 billion expected earlier.

Albemarle also sees adjusted earnings per share guidance for 2023 in the band of $20.75-$25.75, down from its earlier view of $26.00-$33.00.

The company anticipates capital expenditures of $1.7-$1.9 billion for 2023. Net cash from operations is projected to be $1.7-$2.3 billion for the year.

Price Performance

Shares of Albemarle have lost 29.6% in the past year compared with a 7% decline of the industry.

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Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

Albemarle currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. STLD, PPG Industries, Inc. PPG and Linde plc LIN.

Steel Dynamics currently sports a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 24% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 10.7%, on average. STLD has gained around 25% in a year.

PPG Industries currently carries a Zacks Rank #2. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 11.7% upward in the past 60 days.

PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 6.8%, on average. PPG has gained around 5% in a year.

Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% upward in the past 60 days.

Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 16% in the past year.

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Albemarle Corporation (ALB) : Free Stock Analysis Report

Linde PLC (LIN) : Free Stock Analysis Report

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