Albemarle Corporation ALB is slated to release third-quarter 2024 results after the closing bell on Nov. 6.
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The company missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while beating once. In this timeframe, it delivered a negative earnings surprise of 14.3%, on average. It posted a negative earnings surprise of roughly 92.5% in the last reported quarter. ALB is likely to have benefited from healthy lithium volumes and its cost and productivity actions in the third quarter amid headwinds from softer lithium market prices.
ALB’s shares have lost 15.8% over a year compared with the Zacks Chemicals Diversified industry’s 4.3% rise.
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Let’s see how things are shaping up for this announcement.
What do ALB’s Revenue Estimates Say?
The Zacks Consensus Estimate for revenues for Albemarle for the to-be-reported quarter stands at $1,385.8 million, reflecting a decline of around 40% from the year-ago quarter.
The consensus estimate for net sales for the Energy Storage unit for the third quarter is pegged at $768.1 million, reflecting a year-over-year decline of 54.7%.
The Zacks Consensus Estimate for net sale for the Specialties unit is pinned at $344 million, suggesting a year-over-year decrease of 2.5%.
The Zacks Consensus Estimate for net sales for the Ketjen unit stands at $278.4 million, indicating a year-over-year rise of 6.8%.
Factors to Watch For ALB Stock
Albemarle is likely to have benefited from higher volumes in its lithium business in the quarter to be reported. Healthy customer demand, ramp-up of lithium projects and plant productivity improvements are expected to have supported volumes. The La Negra expansion in Chile and the processing plant in Qinzhou, China are likely to have contributed to volumes.
The benefits of ALB’s cost-saving, pricing and productivity initiatives are expected to get reflected in the September quarter. The company delivered more than $150 million in restructuring and productivity benefits in the second quarter and is on track to surpass its initial productivity target for 2024 by roughly 50%. Its cost and productivity actions are expected to have supported margins in the third quarter. Efforts to drive operating efficiency and improve the utilization of raw materials are likely to have aided the company’s performance.
Weaker lithium market prices are likely to have impacted the company’s performance. Lithium prices nosedived more than 80% year over year in 2023, and the weakness continues this year. Prices have declined amid slowing demand growth for electric vehicles, inventory glut and increased supply from China. Weaker lithium prices are likely to have hurt the company’s results in the third quarter.
The company’s Specialties unit is likely to have faced headwinds from demand and pricing weakness in the quarter to be reported. The segment faces demand headwinds in the consumer electronics market. The demand weakness is expected to have continued in the third quarter.
Albemarle Corporation Price and EPS Surprise
Albemarle Corporation price-eps-surprise | Albemarle Corporation Quote
What Our Model Unveils for ALB Stock
Our proven model does not conclusively predict an earnings beat for Albemarle this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for ALB is +13.21%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at a loss of 31 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ALB currently carries a Zacks Rank #4 (Sell).
Basic Materials Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Royal Gold, Inc. RGLD, scheduled to release third-quarter earnings on Nov. 6, has an Earnings ESP of +1.13%.
The Zacks Consensus Estimate for Royal Gold's earnings for the third quarter is currently pegged at $1.33. RGLD currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex Corporation MEOH, scheduled to release earnings on Nov. 6, has an Earnings ESP of +53.67% and carries a Zacks Rank #3.
The consensus estimate for MEOH’s earnings for the third quarter is currently pegged at 44 cents.
Air Products and Chemicals, Inc. APD, slated to release earnings on Nov. 7, has an Earnings ESP of +1.63% and carries a Zacks Rank #3 at present.
The consensus mark for APD’s fiscal fourth-quarter earnings is currently pegged at $3.44.
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