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Methanex's (MEOH) Earnings and Revenues Surpass Estimates in Q2
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Methanex Corporation (MEOH - Free Report) logged a profit (attributable to shareholders) of $107 million or $1.31 per share in the second quarter of 2021 against a loss of $65 million or 85 cents in the year-ago quarter.
Adjusted earnings per share (barring one-time items) in the reported quarter were $1.24 against a loss of 84 cents in the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of $1.05 per share.
Revenues shot up 108.6% year over year to $1,068.3 million in the quarter from $512.3 million a year ago, also surpassing the Zacks Consensus Estimate of $990 million. Strong demand and robust prices led to considerable increases in the top line.
Adjusted EBITDA for the reported quarter skyrocketed 718.8% year over year to $262 million.
Methanex Corporation Price, Consensus and EPS Surprise
Production in the quarter totaled 1,505,000 tons, down around 7.5% year over year. Lower seasonal gas availability in Chile and the temporary suspension of one of its plants in New Zealand partially masked higher production at other sites. Total sales volume for the second quarter was 2,830,000 tons, increasing around 17.6% from the prior-year quarter’s figure.
Average realized price for methanol was $376 per ton in the quarter, increasing 78.2% from $211 in the prior-year quarter. A steady methanol demand and continuing industry supply bottlenecks led to higher methanol prices.
Financials
Cash and cash equivalents decreased 10.1% year over year to $764 million at the end of the second quarter. Long-term debt at the end of the second quarter was around $2,144 million, up nearly 2.6% year over year.
For the second quarter, cash flow from operating activities was $243 million, up around 30.6% year over year. The company paid out dividends worth $3 million during the reported quarter and recently increased the quarterly dividend to 12.5 cents per share from 3.75 cents.
Outlook
Methanex said that its outlook for the methanol industry is positive for the coming days, on the back of the ongoing favorable industry conditions. Strong methanol demand coupled with ongoing industry supply challenges continue to drive tight market conditions into the third quarter, the company noted. New industry supply and its Geismar 3 project are requisites for catering to the methanol demand growth. The company is optimistic about its Geismar 3 project to strengthen its portfolio and support its future cash generation, and also future shareholder distribution increases. It also anticipates the recent shipping partnership between its subsidiary, Waterfront Shipping, and Mitsui O.S.K. Lines, Ltd. to strengthen its financial position, going forward.
Price Performance
Shares of Methanex have surged 82.1% in the past year, outperforming the industry’s growth of 35.4%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Methanex carries a Zacks Rank #4 (Sell).
Image: Bigstock
Methanex's (MEOH) Earnings and Revenues Surpass Estimates in Q2
Methanex Corporation (MEOH - Free Report) logged a profit (attributable to shareholders) of $107 million or $1.31 per share in the second quarter of 2021 against a loss of $65 million or 85 cents in the year-ago quarter.
Adjusted earnings per share (barring one-time items) in the reported quarter were $1.24 against a loss of 84 cents in the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of $1.05 per share.
Revenues shot up 108.6% year over year to $1,068.3 million in the quarter from $512.3 million a year ago, also surpassing the Zacks Consensus Estimate of $990 million. Strong demand and robust prices led to considerable increases in the top line.
Adjusted EBITDA for the reported quarter skyrocketed 718.8% year over year to $262 million.
Methanex Corporation Price, Consensus and EPS Surprise
Methanex Corporation price-consensus-eps-surprise-chart | Methanex Corporation Quote
Operational Highlights
Production in the quarter totaled 1,505,000 tons, down around 7.5% year over year. Lower seasonal gas availability in Chile and the temporary suspension of one of its plants in New Zealand partially masked higher production at other sites. Total sales volume for the second quarter was 2,830,000 tons, increasing around 17.6% from the prior-year quarter’s figure.
Average realized price for methanol was $376 per ton in the quarter, increasing 78.2% from $211 in the prior-year quarter. A steady methanol demand and continuing industry supply bottlenecks led to higher methanol prices.
Financials
Cash and cash equivalents decreased 10.1% year over year to $764 million at the end of the second quarter. Long-term debt at the end of the second quarter was around $2,144 million, up nearly 2.6% year over year.
For the second quarter, cash flow from operating activities was $243 million, up around 30.6% year over year. The company paid out dividends worth $3 million during the reported quarter and recently increased the quarterly dividend to 12.5 cents per share from 3.75 cents.
Outlook
Methanex said that its outlook for the methanol industry is positive for the coming days, on the back of the ongoing favorable industry conditions. Strong methanol demand coupled with ongoing industry supply challenges continue to drive tight market conditions into the third quarter, the company noted. New industry supply and its Geismar 3 project are requisites for catering to the methanol demand growth. The company is optimistic about its Geismar 3 project to strengthen its portfolio and support its future cash generation, and also future shareholder distribution increases. It also anticipates the recent shipping partnership between its subsidiary, Waterfront Shipping, and Mitsui O.S.K. Lines, Ltd. to strengthen its financial position, going forward.
Price Performance
Shares of Methanex have surged 82.1% in the past year, outperforming the industry’s growth of 35.4%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Methanex carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space include Orion Engineered Carbons S.A (OEC - Free Report) , LyondellBasell Industries N.V. (LYB - Free Report) and Cabot Corporation (CBT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Orion has a projected earnings growth rate of 79.8% for the current year. The company’s shares have grown 63.5% over a year.
LyondellBasell has a projected earnings growth rate of 222.6% for the current year. The company’s shares have risen 45.6% over a year.
Cabot has a projected earnings growth rate of 137.5% for the current year. The company’s shares have rallied 39.8% over a year.