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Albemarle (ALB) Q2 Earnings Top Estimates, Sales Fall Short

Zacks

Albemarle Corporation ALB recorded profit of $103.3 million or 92 cents per share for the second quarter of 2017 compared with a loss of $314.8 million or $2.78 a year ago. The results in the reported quarter were supported by gains in the company’s Lithium and Advanced Materials division.

Barring one-time items, adjusted earnings for the reported quarter were $1.13 per share, topping the Zacks Consensus Estimate of $1.11.

Revenues rose around 10% year over year to $737.3 million in the reported quarter. Sales in the quarter rose as favorable impacts of pricing and higher sales volume in Lithium and Advanced Materials more than offset the impact of divestitures of specialty chemicals business and minerals-based flame retardants as well as unfavorable currency impact. Sales, however, trailed the Zacks Consensus Estimate of $740.6 million.

Albemarle Corporation Price, Consensus and EPS Surprise

Albemarle Corporation Price, Consensus and EPS Surprise | Albemarle Corporation Quote


Segment Highlights

Sales from the Lithium and Advanced Materials unit jumped 36% year over year to $317.9 million in the reported quarter, supported by favorable pricing, higher sales volumes, partly offset by unfavorable impacts of currency exchange.

The Bromine Specialties segment raked in sales of $203.9 million, down roughly 1% year over year, affected by reduced pricing and unfavorable currency impact.

The Refining Solutions unit reported revenues of $184.2 million in the reported quarter, up around 4% year over year. Sales were driven by higher sales volumes, partly offset by unfavorable impacts of currency swings and pricing.

Financial Position

Albemarle ended the second quarter with cash and cash equivalents of roughly $1 billion, a more than five-fold year-over-year increase. Long-term debt was $1.4 billion, down around 53% year over year.

Outlook

Albemarle reaffirmed its guidance for 2017. The company continues to see full-year net sales of between $2.90 and $3.05 billion, adjusted earnings per share of between $4.20 and $4.40 and adjusted EBITDA of $835-$875 million.

Price Performance

Albemarle has outperformed the industry it belongs to over a year. The company’s shares have rallied around 50% over this period, compared with roughly 20.6% gain recorded by the industry.



Zacks Rank & Stocks to Consider

Albemarle is a Zacks Rank #3 (Hold) stock.

Better-placed companies in the basic materials space include The Chemours Company CC, Kronos Worldwide, Inc. KRO and BASF SE BASFY, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth of 15.5%.

Kronos has an expected long-term earnings growth of 5%.

BASF has an expected long-term earnings growth of 8.6%.

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