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Albemarle’s (ALB) Q3 Earnings & Revenues Top, Ups View

Zacks

Albemarle Corporation ALB recorded profit of $118.7 million, or $1.06 per share for the third quarter of 2017, down from $128.2 million, or $1.13 per a year ago. The bottom line in the reported quarter was unfavorably impacted by Hurricane Harvey.

Barring one-time items, adjusted earnings for the reported quarter were $1.08 per share, beating the Zacks Consensus Estimate of $1.07.

Revenues rose around 15% year over year to $754.9 million in the reported quarter. It also topped the Zacks Consensus Estimate of $737 million. Sales in the quarter were aided by favorable impacts of pricing and higher sales volume in Lithium and Advanced Materials and Bromine segments as well as favorable currency impacts.

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 42.9% year over year to $343.6 million in the reported quarter, supported by favorable pricing, higher sales volumes and favorable currency impacts.

The Bromine Specialties segment raked in sales of $212.9 million, up 9.5% year over year, driven by higher sales volumes related to flame retardants and favorable pricing.

The Refining Solutions unit reported revenues of $170.3 million in the reported quarter, down 10.6% year over year. The division’s sales were affected by reduced sales volumes and unfavorable pricing, partly offset favorable currency impacts.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $1,045.3 million, a nearly five-fold year-over-year increase. Long-term debt was $1,407.2 million, down around 54% year over year.

Outlook

Albemarle raised its guidance for 2017. The company now sees full-year net sales of between $3 billion and $3.05 billion (compared with prior view of $2.90 billion and $3.05 billion), adjusted earnings per share of between $4.40 and $4.50 (compared with prior view of $4.20 and $4.40) and adjusted EBITDA of $860-$875 million (compared with $835-$875 million expected earlier).

Price Performance

Albemarle has outperformed the industry it belongs to over a year. The company’s shares have rallied around 77.4% over this period, compared with roughly 30.1% gain recorded by the industry.



Zacks Rank & Stocks to Consider

Albemarle is a Zacks Rank #2 (Buy) stock.

Other top-ranked companies in the chemicals space include Westlake Chemical Corporation WLK Kraton Corporation KRA and FMC Corporation FMC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake has an expected long-term earnings growth of 8.4%.

Kraton has an expected earnings growth of 25.4% for the current year.

FMC has an expected long-term earnings growth of 11.3%.

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