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LyondellBasell (LYB) to Post Q4 Earnings: What's in Store?

Zacks Equity Research
·4-min read

LyondellBasell Industries N.V. LYB is scheduled to report fourth-quarter earnings before the opening bell on Feb 2.

The company surpassed Zacks Consensus Estimate in two of the last four quarters while missing it twice, the average earnings surprise being a negative 5%. It posted a negative earnings surprise of 33.8% in the last reported quarter.

LYB's fourth-quarter results are likely to reflect soft seasonal demand, weaker volumes and elevated input cost inflation across its segments.

The stock has lost 3.6% in the past year against the industry’s rise of 2.6%.

Image Source: Zacks Investment Research

What Do the Estimates Say?

The Zacks Consensus Estimate for the to-be-reported quarter is currently pegged at $10,434 million, which suggests a decline of 18.7% from the year-ago reported figure.

The Zacks Consensus Estimate for the Olefins and Polyolefins – Americas division’s revenues is currently pegged at $2,858 million, implying a decline of 28.8% year over year.

The consensus estimate for the Olefins and Polyolefins – Europe, Asia & International division’s revenues currently stands at $2,236 million, indicating a decline of 36.7% from the year-ago reported figure.

The Zacks Consensus Estimate for revenues of LYB’s Advanced Polymer Solutions segment for the fourth quarter is $1,201 million, suggesting a decline of 4.2%.

The consensus estimate for its Intermediaries and Derivatives segment is currently pegged at $2,936 million, which implies a 0.1% rise from the prior year’s levels. The same for LYB’s Refining segment is $2,924 million, suggesting a rise of 10.6%. The consensus estimate for its Technology segment stands at $168 million, which indicates a 34.6% decline from the year-ago reported figure.

Some Factors to Watch

LYB’s fourth-quarter earnings are likely to reflect higher feedstock, energy costs and demand pressures, which are expected to have weighed in on its margins. Weaker seasonal demand and volatile energy costs might have hurt the company’s performance in the fourth quarter in its Europe and Americas businesses.  

However, styrene margins in the Intermediates and Derivatives segment are likely to have seen improvement due to lower feedstock costs. Oxyfuel margins are likely to have remained under pressure due to weak demand. Also, slight improvements in the automotive end market are expected to have provided support to the Advanced Polymers Solution segment. But elevated feedstock and energy costs might have weighed on margins in this segment. The company’s Technology segment is likely to have been affected by moderate levels of revenues from licensing and lower catalyst volumes.

Zacks Model

Our proven model does not conclusively predict an earnings beat for LyondellBasell this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings Beat: Earnings ESP for LyondellBasell is +0.76%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.09. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LyondellBasell currently carries a Zacks Rank #4 (Sell).

LyondellBasell Industries N.V. Price and EPS Surprise

LyondellBasell Industries N.V. price-eps-surprise | LyondellBasell Industries N.V. Quote

Stocks That Warrant a Look

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

Air Products and Chemicals, Inc. APD, which is scheduled to release earnings on Feb 2, has an Earnings ESP of +2.67% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 stocks here.

The Zacks Consensus Estimate for Air Products’ fiscal first-quarter earnings has been revised 0.4% upward in the past 60 days. The consensus estimate for APD’s earnings for the first quarter is currently pegged at $2.73.

Huntsman Corporation HUN, which is scheduled to release earnings on Feb 21, has an Earnings ESP of +7.14% and carries a Zacks Rank #3.

The Zacks Consensus Estimate for earnings for HUN for the fourth quarter is pegged at 11 cents.

Teck Resources Limited TECK, which is slated to release earnings on Feb 21, has an Earnings ESP of +3.48% and carries a Zacks Rank #2.

The Zacks Consensus Estimate for earnings for TECK for the fourth quarter is pegged at 94 cents.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.












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