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Methanex (MEOH) Earnings Beat, Revenues Miss Estimates in Q2

Methanex Corporation MEOH slipped to a loss (attributable to shareholders) of $65 million or 85 cents per share in the second quarter of 2020 from a profit of $50 million or 51 cents per share in the year-ago quarter.

Adjusted loss per share (barring one-time items) in the reported quarter was 84 cents, which was narrower than the Zacks Consensus Estimate of a loss of $1.05.

Revenues declined 39.6% year over year to $512 million in the quarter. The results were impacted by lower year-over-year methanol prices. Moreover, it missed the Zacks Consensus Estimate of $593 million.

Adjusted EBITDA tumbled 78% year over year to $32 million.

Methanex Corporation Price, Consensus and EPS Surprise

 

Methanex Corporation Price, Consensus and EPS Surprise

Methanex Corporation price-consensus-eps-surprise-chart | Methanex Corporation Quote

Operational Highlights

Production in the quarter totaled 1,628,000 tons, down 10.5% year over year. Total sales volume was 2,406,000 tons, down 7.5% year over year.

Average realized price for methanol was $211 per ton in the quarter, down 35.3% from $326 in the prior-year quarter.

Financials

For the reported quarter, cash flow from operating activities was $186 million, up 58.9% year over year. The company had cash and cash equivalents of $783 million, up 243.4% year over year.

Outlook

Methanex is seeing signs of improving methanol demand with global economic activity starting to recover and oil pricing stabilizing in recent weeks. Notably, it stated that it cannot accurately forecast the short-term outlook due to uncertainties regarding the duration and extent of the coronavirus pandemic, and the low oil price environment.

Price Performance

Shares of the company have lost 53.1% in the past year compared with the industry’s 5.6% decline.

 

 

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX andB2Gold Corp BTG.

Royal Goldhas a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained 19.3% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The company has gained around 94% in a year. It currently has a Zacks Rank of 2 (Buy).

B2Goldhas an expected earnings growth rate of 257.1% for 2020. The company’s shares have rallied 108.5% in the past year.It is presently a Zacks #2 Ranked player.

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