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Why Is Albemarle (ALB) Up 9.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Albemarle (ALB - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Albemarle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Albemarle Beats on Q2 Earnings and Sales, Raises FY22 View
Albemarle logged a profit of $406.8 million or $3.46 per share in the second quarter of 2022, down from a profit of $424.6 million or $3.62 per share a year ago.
Adjusted earnings in the reported quarter were $3.45 per share, topping the Zacks Consensus Estimate of $3.03. Our estimate for the quarter was $2.89.
Revenues climbed roughly 91% year over year to $1,479.6 million in the quarter and surpassed the Zacks Consensus Estimate of $1,370.8 million. The figure compares to our estimate of $1,423.7 million.
The top line was driven by higher pricing across the company’s segments on the back of strong demand from diverse end markets.
Segment Highlights
Sales from the Lithium unit surged 178% year over year to $891.5 million. This compares to the consensus estimate of $917.9 million and our estimate of $904.9 million. Sales were driven by higher pricing (up 160% 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 Bromine Specialties segment recorded sales of $377.8 million, up 35% year over year. This compares to the consensus estimate of $335.5 million and our estimate of $374.2 million. Sales were supported by a 31% (net of currency) rise in pricing and 4% higher volume. Tight market conditions led to strong demand and favorable pricing.
The Catalysts unit recorded revenues of $210.3 million in the reported quarter, up 42% year over year. This compares to the consensus estimate of $204 million and our estimate of $144.6 million. Volumes rose 37% while pricing increased 5% (net of currency).
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $930.6 million, up around 13% year over year. Long-term debt was $3,205.7 million, up around 57% year over year.
Cash flow from operations was $60.3 million for the six months ended Jun 30, 2022, down around 84% year over year.
Outlook
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion.
Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
The company anticipates capital expenditures of $1.3-1.5 billion for 2022. Net cash from operations is projected to be $1.4-$1.7 billion. The company also expects to be free cash flow positive in 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 80.61% due to these changes.
VGM Scores
Currently, Albemarle has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Albemarle has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Albemarle belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, FMC (FMC - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
FMC reported revenues of $1.45 billion in the last reported quarter, representing a year-over-year change of +16.9%. EPS of $1.93 for the same period compares with $1.81 a year ago.
FMC is expected to post earnings of $1.12 per share for the current quarter, representing a year-over-year change of -21.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.8%.
FMC has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Albemarle (ALB) Up 9.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Albemarle (ALB - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Albemarle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Albemarle Beats on Q2 Earnings and Sales, Raises FY22 View
Albemarle logged a profit of $406.8 million or $3.46 per share in the second quarter of 2022, down from a profit of $424.6 million or $3.62 per share a year ago.
Adjusted earnings in the reported quarter were $3.45 per share, topping the Zacks Consensus Estimate of $3.03. Our estimate for the quarter was $2.89.
Revenues climbed roughly 91% year over year to $1,479.6 million in the quarter and surpassed the Zacks Consensus Estimate of $1,370.8 million. The figure compares to our estimate of $1,423.7 million.
The top line was driven by higher pricing across the company’s segments on the back of strong demand from diverse end markets.
Segment Highlights
Sales from the Lithium unit surged 178% year over year to $891.5 million. This compares to the consensus estimate of $917.9 million and our estimate of $904.9 million. Sales were driven by higher pricing (up 160% 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 Bromine Specialties segment recorded sales of $377.8 million, up 35% year over year. This compares to the consensus estimate of $335.5 million and our estimate of $374.2 million. Sales were supported by a 31% (net of currency) rise in pricing and 4% higher volume. Tight market conditions led to strong demand and favorable pricing.
The Catalysts unit recorded revenues of $210.3 million in the reported quarter, up 42% year over year. This compares to the consensus estimate of $204 million and our estimate of $144.6 million. Volumes rose 37% while pricing increased 5% (net of currency).
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $930.6 million, up around 13% year over year. Long-term debt was $3,205.7 million, up around 57% year over year.
Cash flow from operations was $60.3 million for the six months ended Jun 30, 2022, down around 84% year over year.
Outlook
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion.
Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
The company anticipates capital expenditures of $1.3-1.5 billion for 2022. Net cash from operations is projected to be $1.4-$1.7 billion. The company also expects to be free cash flow positive in 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 80.61% due to these changes.
VGM Scores
Currently, Albemarle has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Albemarle has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Albemarle belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, FMC (FMC - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
FMC reported revenues of $1.45 billion in the last reported quarter, representing a year-over-year change of +16.9%. EPS of $1.93 for the same period compares with $1.81 a year ago.
FMC is expected to post earnings of $1.12 per share for the current quarter, representing a year-over-year change of -21.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.8%.
FMC has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.