Albemarle Corporation Set to Announce Q3 2024 Earnings Amid Market Challenges
Albemarle Corporation (ALB) will release its third-quarter 2024 results after the closing bell on November 6.
Stay informed about quarterly announcements: Check Zacks’ Earnings Calendar.
The company has had a mixed performance recently, missing the Zacks Consensus Estimate for earnings in three out of the last four quarters, with one successful beat. Over this period, it experienced an average negative earnings surprise of 14.3%, including a significant 92.5% miss in the most recent quarter. However, ALB is expected to benefit from strong lithium volumes and efficiency improvements despite facing pressure from falling lithium prices.
In the past year, ALB’s shares have declined by 15.8%, in contrast to a 4.3% increase in the Zacks Chemicals Diversified industry.
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Let’s examine what to expect from the upcoming announcement.
Revenue Estimates for Albemarle
The Zacks Consensus Estimate for Albemarle’s revenues in the upcoming quarter is $1,385.8 million, marking a significant drop of approximately 40% from the same quarter last year.
The estimate for net sales in the Energy Storage unit is projected at $768.1 million, reflecting a steep decline of 54.7% year-over-year. Meanwhile, the consensus estimate for the Specialties unit is $344 million, indicating a slight decrease of 2.5% compared to last year. The Ketjen unit, however, is expected to see a year-over-year increase of 6.8%, with net sales reaching $278.4 million.
Key Factors Affecting ALB Stock
In the upcoming quarter, Albemarle is anticipated to benefit from increased lithium volumes. Factors such as strong customer demand, the ramp-up of lithium projects, and improved plant productivity should have supported these volumes. Notably, the La Negra expansion in Chile and the processing plant in Qinzhou, China may have played significant roles.
ALB’s cost reduction and productivity measures are expected to be visible in the latest results. In the second quarter, the company achieved over $150 million in restructuring savings and is projected to exceed its initial productivity goals for 2024 by around 50%. Ongoing initiatives to enhance operational efficiency will likely help margins.
Despite these positives, the company has been affected by lower lithium prices. Since 2023, lithium prices have plummeted by over 80%, continuing to decline this year, influenced by sluggish electric vehicle demand, excess inventory, and increased supply from China. This pricing weakness is expected to negatively impact ALB’s results for the third quarter.
ALB’s Specialties unit may also face challenges due to ongoing demand and price issues, particularly in the consumer electronics sector, which is expected to persist into the upcoming quarter.
Recent Price and EPS Trends for Albemarle Corporation
Albemarle Corporation price-eps-surprise | Albemarle Corporation Quote
Earnings Prediction Insights for ALB
Currently, our model suggests that an earnings beat for Albemarle may not be likely this quarter. A combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) usually signals potential for an earnings beat. However, ALB is not aligned with these favorable conditions.
Earnings ESP: ALB has an Earnings ESP of +13.21%. The Zacks Consensus Estimate for third-quarter earnings currently stands at a loss of 31 cents. For insights on potential stock winners, utilize our Earnings ESP Filter.
Zacks Rank: ALB holds a Zacks Rank of #4 (Sell) at this time.
Other Basic Materials Stocks to Consider
Consider these companies in the basic materials sector that may have the elements needed for an earnings beat this quarter:
Royal Gold, Inc. (RGLD), set to announce third-quarter earnings on November 6, has an Earnings ESP of +1.13% and a Zacks Rank of #2.
The consensus estimate for Royal Gold’s third-quarter earnings is currently $1.33. Explore the complete list of today’s Zacks #1 Rank stocks here.
Methanex Corporation (MEOH), also reporting earnings on November 6, boasts an Earnings ESP of +53.67% and a Zacks Rank of #3. The consensus estimate for MEOH’s earnings stands at 44 cents.
Air Products and Chemicals, Inc. (APD), scheduled to release earnings on November 7, has an Earnings ESP of +1.63% and carries a Zacks Rank of #3. The consensus estimate for APD’s fiscal fourth-quarter earnings is currently $3.44.
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Air Products and Chemicals, Inc. (APD): Detailed Stock Analysis Report
Methanex Corporation (MEOH): Detailed Stock Analysis Report
Albemarle Corporation (ALB): Detailed Stock Analysis Report
Royal Gold, Inc. (RGLD): Detailed Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
