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LyondellBasell (LYB) Q2 Earnings and Sales Beat Estimates

·4 min read

LyondellBasell Industries N.V. LYB posted profits of $1,644 million or $4.98 per share in second-quarter 2022, down from $2,059 million or $6.13 in the year-ago quarter.

Adjusted earnings came in at $5.19 per share in the quarter, surpassing the Zacks Consensus Estimate of $4.97.

Revenues increased 28.3% year over year to $14,838 million in the reported quarter. The figure surpassed the consensus mark of $14,404.7 million.

Consolidated EBITDA in the quarter declined 21.1% year over year to $2,381 million.

The company’s global portfolio of businesses delivered strong earnings and cash generation in the reported quarter, led by record results from the Intermediates & Derivatives segment and strong refining margins.

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise

 

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise
LyondellBasell Industries N.V. Price, Consensus and EPS Surprise

LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote

 

Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA decreased 42.6% year over year to $905 million in the reported quarter. Olefins’ results fell due to lower margins and volumes.

The Olefins & Polyolefins — Europe, Asia, the International segment witnessed a decline in EBITDA of 77.5% year over year to $159 million. Olefins results declined about $95 million due to reduced margins and volumes. Ethylene margins fell due to higher feedstock and energy costs, partly offset by higher ethylene and co-product prices.

The Advanced Polymer Solutions segment posted an EBITDA of $118 million, down from $129 million in the year-ago quarter. The downside was caused by lower volumes driven by constrained production in automotive end markets.

EBITDA in the Intermediates and Derivatives segment increased 13.3% on a year-over-year basis to $675 million. Propylene Oxide & Derivatives results declined due to reduced demand and higher natural gas costs in Europe.

The Refining segment reported an EBITDA of $418 million in the reported quarter against a loss of $81 million in the year-ago quarter.

The Technology segment’s EBITDA was $112 million in the reported quarter, up 21.7% year over year. The upside was due to higher licensing revenue and catalyst volume with stronger demand in Asia.

Financials

LyondellBasell generated $1.6 billion in cash from operating activities during the quarter. The company returned $2.1 billion to shareholders through dividends and share repurchases.

Outlook

The company stated that its strong business portfolio is providing resilience during the third quarter with continued strength in demand from packaging markets and favorable margins for oxyfuels and refined products. Its diverse businesses are well placed to serve evolving trends in global demand as consumers' needs transition from durables toward service industries and mobility.

LyondellBasell expects moderating demand and elevated costs for feedstocks and energy to compress margins across most of the company's businesses in the third quarter. It is starting commissioning activities for its largest growth investment in the third quarter.

Price Performance

Shares of LyondellBasell have declined 10.9% in the past year compared with a 9.9% decline of the industry.

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Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB, Cabot Corporation CBT and Sociedad Quimica y Minera de Chile S.A. SQM.

Albemarle has a projected earnings growth rate of 241.8% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 21.5% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 22.5%, on average. ALB has gained around 14.7% in a year and currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 32.6% over a year.

Sociedad has a projected earnings growth rate of 431.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 36.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has gained 104.7% in a year. The company sports a Zacks Rank #1.


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