Methanex (MEOH) Q1 Earnings Meet, Revenues Beat Estimates

Methanex Corporation MEOH logged a profit (attributable to shareholders) of $105 million or $1.19 per share in the first quarter of 2021 compared with a profit of $23 million or 21 cents per share in the year-ago quarter.

Adjusted earnings per share (barring one-time items) in the reported quarter were $1.07, in line with the Zacks Consensus Estimate.

Revenues rose around 36.4% year over year to $1,016 million in the quarter. It surpassed the Zacks Consensus Estimate of $854 million.

Adjusted EBITDA for the reported quarter increased 75.4% year over year to $242 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 1,596,000 tons, down around 21% year over year. Total sales volume for the first quarter was 2,793,000 tons, almost in line with prior-year quarter’s figures.

Average realized price for methanol was $363 per ton in the quarter, up roughly 14.3% from $267 per ton in the prior-year quarter. A steady recovery in methanol demand and lower industry operating rates led to higher methanol prices. Strong methanol demand coupled with low global inventory levels and ongoing industry-supply challenges continue to drive tight market conditions into the second quarter, the company noted.

Financials

Cash and cash equivalents increased around 4% year-over-year to $856 million at the end of the first quarter. Long term debt at the end of first quarter was $2,305.6 million, up around 7.3% year over year.

For the first quarter, cash flow from operating activities was $167 million, up around 17.6% year over year. The company paid out dividends worth $3 billion during the reported quarter.

Outlook

Methanex is encouraged by favorable industry conditions in the first quarter followed by positive momentum heading into the second quarter. The company expects manufacturing activity to rebound and the economy to fully recover in the medium term as vaccine rollouts accelerate and as governments announce additional fiscal support measures. It is focused on preserving liquidity and financial flexibility to boost shareholders’ value in the long term.

Moreover, the company expects to spend around $60 million on its Geismar 3 project, during the care and maintenance period, over the next six months.

Price Performance

Shares of Methanex have surged 157.9% in the past year compared with 64.7% rise of the industry.

Zacks Rank & Key Picks

Methanex currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Dow Inc. DOW, Nucor Corporation NUE and Impala Platinum Holdings Limited IMPUY.

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 72.5% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 228.4% for the current year. The company’s shares have gained 98.1% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have skyrocketed 243.2% in the past year. It currently flaunts a Zacks Rank #1.

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