A month has gone by since the last earnings report for Albemarle (ALB). Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Albemarle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Albemarle's Q3 Earnings and Sales Miss on Lower Lithium Pricing

Albemarle logged a loss of $9.45 per share in the third quarter of 2024. In the year-ago quarter, the company had reported earnings of $2.57 per share. Barring one-time items, adjusted loss for the reported quarter came in at $1.55 per share. It was wider than Zacks Consensus Estimate of a loss of 31 cents. The bottom line was hurt by pre-tax charges of $861 million related to restructuring charges and asset write-offs. 

Revenues fell roughly 41% year over year to roughly $1.35 billion in the quarter. It missed the Zacks Consensus Estimate of $1.39 billion. The top line was hurt by lower prices in the Energy Storage segment, partly offset by the volume growth in Energy Storage and Specialties units. Lower lithium market pricing impacted the company's results in the quarter. This was partly masked by volume growth and cost and productivity benefits.

Segment Highlights

Sales from the Energy Storage unit fell around 55% year over year to $767 million. It missed the consensus estimate of $768.1 million. The decline in sales was attributed to reduced pricing. Sales volumes increased driven by the ramp of lithium projects, including the La Negra expansion in Chile and processing plants in Qinzhou and Meishan in China, and sales of chemical-grade spodumene.

The Specialties segment recorded sales of $342 million, down around 3% year over year. It was below the consensus estimate of $344 million. Lower pricing impacted sales, partly offset by increased volumes.

The Ketjen unit recorded revenues of $245 million in the reported quarter, down roughly 6% year over year. It was below the consensus estimate of $278.4 million. Higher prices aided sales, partly masked by lower volumes.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $1.66 billion, down around 9% sequentially. Long-term debt was around $3.56 billion, up around 1% from the prior quarter.

Cash from operations was $241 million in the third quarter and $701 million for the nine months ended Sept. 30, 2024.

Outlook

Albemarle maintained its outlook considerations for full-year 2024 factoring in cost and productivity improvements, higher volumes and the performance of long-term contracts. 

The company has lowered capital expenditures for full-year 2025 by roughly 50% compared with 2024 to a range of $800-$900 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted 10.48% due to these changes.

VGM Scores

Currently, Albemarle has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Albemarle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Albemarle is part of the Zacks Chemical - Diversified industry. Over the past month, Chemours (CC), a stock from the same industry, has gained 3.2%. The company reported its results for the quarter ended September 2024 more than a month ago.

Chemours reported revenues of $1.5 billion in the last reported quarter, representing a year-over-year change of +0.9%. EPS of $0.40 for the same period compares with $0.64 a year ago.

For the current quarter, Chemours is expected to post earnings of $0.29 per share, indicating a change of -6.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Chemours. Also, the stock has a VGM Score of F.

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