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Methanex (MEOH) Down 7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Methanex (MEOH - Free Report) . Shares have lost about 7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Methanex due for a breakout? 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 drivers.
Methanex's Q2 Earnings Beat Estimates, Sales Miss
Methanex logged second-quarter 2024 adjusted earnings of 62 cents per share compared with 60 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 49 cents.
Revenues declined around 2.1% year over year to $920 million in the quarter. The top line also missed the Zacks Consensus Estimate of $986.4 million.
Adjusted EBITDA in the reported quarter rose 2.5% year over year to $164 million.
Operational Highlights
Production in the quarter totaled 1,422,000 tons, down around 14.2% year over year. The figure was below our estimate of 1,648,000 tons. Total sales volume in the second quarter was 2,612,000 tons, lower than the prior-year quarter’s figure of 2,782,000 tons. The figure missed our estimate of 2,853,000 tons.
The average realized price for methanol was $352 per ton, up roughly 4.1% from $338 in the prior-year quarter. The figure was above our estimate of $346 per ton.
Financials
Cash and cash equivalents rose 4.7% from the prior quarter to $426.1 million at the end of the second quarter. Long-term debt at the end of the quarter was $1,821.5 million, stable sequentially.
Cash flow from operating activities was $163 million, down around 16.8% year over year. The company returned $12.5 million to shareholders in regular dividends.
Outlook
Methanex's production for 2024 is estimated to be around 7 million tons. Quarterly production may vary due to gas availability in Chile and New Zealand, start-up of the G3 plant, turnarounds, unforeseen outages and unanticipated events.
For the third quarter, the company anticipates decreased earnings due to lower production from Chile and New Zealand, as well as G3 accumulating inventory. The company's posted pricing for July and August indicate an average realized price range of $350 to $360 per ton for these months.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted 20.9% due to these changes.
VGM Scores
At this time, Methanex has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Methanex (MEOH) Down 7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Methanex (MEOH - Free Report) . Shares have lost about 7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Methanex due for a breakout? 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 drivers.
Methanex's Q2 Earnings Beat Estimates, Sales Miss
Methanex logged second-quarter 2024 adjusted earnings of 62 cents per share compared with 60 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 49 cents.
Revenues declined around 2.1% year over year to $920 million in the quarter. The top line also missed the Zacks Consensus Estimate of $986.4 million.
Adjusted EBITDA in the reported quarter rose 2.5% year over year to $164 million.
Operational Highlights
Production in the quarter totaled 1,422,000 tons, down around 14.2% year over year. The figure was below our estimate of 1,648,000 tons. Total sales volume in the second quarter was 2,612,000 tons, lower than the prior-year quarter’s figure of 2,782,000 tons. The figure missed our estimate of 2,853,000 tons.
The average realized price for methanol was $352 per ton, up roughly 4.1% from $338 in the prior-year quarter. The figure was above our estimate of $346 per ton.
Financials
Cash and cash equivalents rose 4.7% from the prior quarter to $426.1 million at the end of the second quarter. Long-term debt at the end of the quarter was $1,821.5 million, stable sequentially.
Cash flow from operating activities was $163 million, down around 16.8% year over year. The company returned $12.5 million to shareholders in regular dividends.
Outlook
Methanex's production for 2024 is estimated to be around 7 million tons. Quarterly production may vary due to gas availability in Chile and New Zealand, start-up of the G3 plant, turnarounds, unforeseen outages and unanticipated events.
For the third quarter, the company anticipates decreased earnings due to lower production from Chile and New Zealand, as well as G3 accumulating inventory. The company's posted pricing for July and August indicate an average realized price range of $350 to $360 per ton for these months.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted 20.9% due to these changes.
VGM Scores
At this time, Methanex has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.