Albemarle (ALB) Down 16.3% Since Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Albemarle Corporation (NYSE:ALB) . Shares have lost about 16.3% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is ALB due for a breakout? 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 catalysts.

Albemarle's Q4 Earnings & Revenues Top Estimates

Albemarle swung to a loss of $218.4 million, or $1.95 per share in the fourth quarter of 2017 from a profit of $602.1 million, or $5.30 per a year ago. The bottom line in the reported quarter was hurt by a $366.9 million of income tax expense associated with the new U.S. tax reform laws.

Barring one-time items, adjusted earnings for the reported quarter were $1.34 per share, beating the Zacks Consensus Estimate of $1.21.

Revenues rose around 23% year over year to $857.8 million in the reported quarter. It also topped the Zacks Consensus Estimate of $791.5 million. Sales in the quarter were aided by favorable impacts of pricing and higher sales volume across the company’s segments as well as favorable currency impacts.

FY17 Results

For 2017, profit was $54.9 million or 49 cents per share, down from with $643.7 million or $5.68 per share logged a year ago. Adjusted earnings per share for the year were $4.59.

Revenues for the full year rose roughly 15% year over year to roughly $3,072 million, driven by higher sales volumes in all businesses and favorable pricing.

Segment Highlights

Sales from the Lithium and Advanced Materials unit jumped 30% year over year to $362.4 million in the reported quarter, supported by favorable pricing, higher sales volumes and favorable currency impacts.

The Bromine Specialties segment raked in sales of $219.1 million, up 13% year over year, driven by higher sales volumes and favorable pricing.

The Refining Solutions unit reported revenues of $238.4 million in the reported quarter, up 24% year over year. The division’s sales were supported by favorable pricing, higher sales volumes and favorable currency impacts.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $1,137.3 million, down 50% year over year. Long-term debt was $1,415.4 million, down around 33% year over year.

Outlook

Albemarle sees adjusted earnings per share for 2018 in the band of $5.00 and $5.40, a year-over-year increase of 9.

The company also envisions net sales for 2018 to be between $3.2 billion and $3.4 billion. Adjusted EBITDA has been forecast in the range of $955 million to $1,005 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

VGM Scores

At this time, ALB has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. The stock was also allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Zacks' style scores indicate that the company's stock is suitable for value and growth investors.

Outlook

ALB has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.