A month has gone by since the last earnings report for Albemarle (ALB Quick QuoteALB - Free Report) . Shares have lost about 0.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Albemarle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Albemarle's Q2 Earnings Top Estimates, Revenues Lag

Albemarle logged a profit of $650 million or $5.52 per share in the second quarter of 2023, up from a profit of $406.8 million or $3.46 per share a year ago.

Adjusted earnings in the reported quarter came in at $7.33 per share, topping the Zacks Consensus Estimate of $4.27.

Revenues climbed roughly 60% year over year to $2,370.2 million in the quarter, However, it missed the Zacks Consensus Estimate of $2,507.6 million. The top line was driven by higher pricing from Energy Storage and Ketjen units. However, the company saw lower volumes in the Specialties segment.

Segment Highlights

Sales from the Energy Storage unit surged around 120% year over year to $1,763.1 million. It fell short of our estimate of $1,861.2 million. Sales were driven by increased volumes and higher pricing due to tight market conditions. Volumes rose 36% in the quarter on the back of the La Negra III/IV expansion in Chile, increased tolling volumes to meet rising customer demand and production from the processing plant in Qinzhou, China.

The Specialties segment recorded sales of $371.3 million, down around 20% year over year. It was below our estimate of $517.9 million. Sales were impacted by 15% lower volumes and a 5% decline in pricing due to softer demand.

The Ketjen unit recorded revenues of $235.8 million in the reported quarter, up roughly 12% year over year. It was above our estimate of $199.3 million. Sales were aided by higher prices, especially from fluid catalytic cracking and clean fuel technologies.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $1,599.7 million, up around 72% year over year. Long-term debt was around $3,509.3 million, up around 9% year over year.

Cash flow from operations was $794.7 million for the quarter, up from $60.3 million a year ago.

Outlook

Albemarle raised its outlook for net sales and adjusted EBITDA for 2023 factoring in the recent rise lithium market prices. It now expects net sales in the band of $10.4-$11.5 billion, compared with $9.8-$11.5 billion expected earlier. It sees continued global shift to electric vehicles to drive a 40-55% year-over-year rise in net sales in 2023. Adjusted EBITDA for the year is now forecast to be $3.8-$4.4 billion, compared with $3.3-$4 billion expected earlier.

Albemarle also expects adjusted earnings per share for 2023 in the band of $25.00-$29.50, up from its earlier view of $20.75-$25.75.

The company now anticipates capital expenditures of $1.9-$2.1 billion for 2023. Net cash from operations is projected to be $1.2-$1.8 billion for the year.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

The consensus estimate has shifted 6.93% due to these changes.

VGM Scores

Currently, Albemarle has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Albemarle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.