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LyondellBasell Misses on Earnings & Revs - Analyst Blog

Posted
10/29/2013 1:05:00 PM
By: Zacks.com
Referenced Stocks:APD;DD;EI;LYB;PPG

Chemicals and polymers maker LyondellBasell Industries ( LYB ) posted earnings from continuing operations of $1.51 per share for the third quarter of 2013, up from $1.47 per share recorded a year ago. However, the results missed the Zacks Consensus Estimate of $1.59. The year-ago quarter's results included one-time gains of 11 cents per share.

Consolidated profit crept up 0.8% year over year to $851 million or $1.50 per share in the quarter from $844 million or $1.46 per share a year ago. The company leveraged favorable North American natural gas environment in the reported quarter.

LyondellBasell logged revenues of $11,152 million in the quarter, down roughly 1% year over year as gains in olefins and polyolefins businesses were masked by declines across intermediates and derivatives and refining units. It missed the Zacks Consensus Estimate of $11,440 million.

Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) fell roughly 4% year over year to $1,531 million.

The Netherlands-based company's shares fell roughly 2% in pre-market trading, reflecting the miss.  

Segment Highlights

Revenues from the Olefins & Polyolefins - Americas division rose 3% year over year to $3,315 million. EBITDA rose 3% year over year to $841 million, helped by improved polyethylene performance on increased pricing and higher ethane cracking at reduced costs.  

Sales from the Olefins & Polyolefins - Europe, Asia, International segment went up around 4% year over year to $3,594 million. EBITDA doubled year over year to $204 million on the back of higher olefin margins driven by better ethylene prices and increased volumes.

Intermediates and Derivatives segment sales fell 7% to $2,452 million in the reported quarter. EBITDA declined 10% year over year to $427 million, hurt by softer butanediol and solvents market conditions and weak oxyfuels results.

Revenues from the Refining segment fell around 3% to $3,177 million. EBITDA slid 95% year over year to $8 million, in part, due to higher natural gas costs, plant maintenance and oversupply in the gasoline market. Renewable Identification Numbers (RINs) costs to meet U.S. renewable fuel standards rose $28 million from the year-ago quarter.

Technology segment sales were flat year over year at $124 million. EBITDA rose 6% year over year to $52 million as a decline in licensing sales was more than offset by increased catalyst sales and lower R&D costs.  

Financials

LyondellBasell ended the quarter with cash and cash equivalents of $4,414 million, up 25% year over year. Long-term debt increased 34% year over year to $5,774 million. LyondellBasell bought back 13.5 million shares in the reported quarter.

Outlook

LyondellBasell said that factors that aided its results in the third quarter will remain in place in the fourth. The company has historically seen lower margin in products such as oxyfuels in winter months and sluggish polyolefin revenues around the holiday season.

LyondellBasell, which remains challenged by a weak European market, continues to progress with its expansion projects that are expected to contribute to its earnings.  It expects to complete the methanol restart project in the fourth quarter followed by the La Porte ethylene debottleneck expansion in mid-2014.

LyondellBasell, which has emerged from Chapter 11 bankruptcy in 2010, is among the leading plastics, chemical and refining companies globally with operations across 18 countries. The company's products are used across a bevy of industries including electronics, automotive parts, packaging, construction materials and biofuels.  

LyondellBasell currently retains a short-term Zacks Rank #3 (Hold).

Other companies in the chemical industry with favorable Zacks Rank are du Pont ( DD ), Air Products & Chemicals Inc. ( APD ) and PPG Industries Inc. ( PPG ). All of them carry a Zacks Rank #2 (Buy).



AIR PRODS & CHE (APD): Free Stock Analysis Report

DU PONT (EI) DE (DD): Free Stock Analysis Report

LYONDELLBASEL-A (LYB): Free Stock Analysis Report

PPG INDS INC (PPG): Free Stock Analysis Report

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