Albemarle Corporation ALB is scheduled to come up with third-quarter 2022 results after the bell on Nov 2. The company’s profitability is expected to have boosted by higher lithium selling prices and volumes in the quarter.
Higher Lithium Prices to Boost Margins
Higher lithium prices aided by strong demand and tight supply are likely to have driven the company’s sales and margins in the third quarter. Tight supply conditions and growing demand for electric vehicles are driving lithium prices. The company’s average realized pricing for lithium is expected to have been driven by renegotiated contracts and higher market pricing in the quarter to be reported.
The company is also likely to have gained from higher volumes in its lithium business in the September quarter. Higher customer demand, new capacity and plant productivity improvements are expected to have supported volumes.
The La Negra III/IV expansion in Chile is also likely to have contributed to higher volumes. Benefits of higher prices and volumes are expected to reflect on the company’s lithium sales and margins in the third quarter.
The Zacks Consensus Estimate for net sales for the Lithium unit stands at $1,346 million, indicating a 274.9% year-over-year rise. The consensus estimate adjusted EBITDA for the Lithium segment is pegged at $928 million, suggesting a 642.4% year-over-year increase.
Albemarle Corporation Price and EPS Surprise
Albemarle Corporation price-eps-surprise | Albemarle Corporation Quote
The Zacks Consensus Estimate for third-quarter consolidated revenues for Albemarle is currently pegged at $2,118 million, reflecting an increase of around 155% from the year-ago quarter. The consensus estimate for earnings is $6.84, which indicates a substantial rise from the prior-year reported number.
Our proven model predicts an earnings beat for Albemarle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Albemarle is +3.64%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Albemarle currently carries a Zacks Rank #1.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these too have the right combination of elements to post an earnings beat this quarter:
Koppers Holdings Inc. KOP, slated to release earnings on Nov 4, has an Earnings ESP of +2.28% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
ATI Inc. ATI, scheduled to release earnings on Nov 2, has an Earnings ESP of +1.15%.
The Zacks Consensus Estimate for ATI's earnings for the third quarter is currently pegged at 52 cents. ATI currently carries a Zacks Rank #3.
Huntsman Corporation HUN, scheduled to release earnings on Nov 4, has an Earnings ESP of +3.59%.
The consensus estimate for Huntsman’s third-quarter earnings is currently pegged at 72 cents. HUN currently carries a Zacks Rank #3.
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