LyondellBasell (LYB) Misses Q1 Earnings Estimates, Sales Top

LyondellBasell’s (NYSE:LYB) profits from continuing operations, as reported, fell around 22% year over year to $805 million or $2.00 per share in the first quarter of 2017. Earnings in the reported quarter were hit by charges related to repayment of debt.

Barring one-time items, earnings came in at $2.26 per share for the quarter, trailing the Zacks Consensus Estimate of $2.33.

Revenues rose roughly 25% year over year to $8,430 million in the quarter, surpassing the Zacks Consensus Estimate of $7,877 million.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) fell around 11% year over year to $1,617 million in the quarter. The company noted that scheduled maintenance at its U.S. butadiene recovery plant affected margins during the quarter.

Segment Review

Revenues from the Olefins & Polyolefins – Americas division went up 23% year over year to $2,604 million in the reported quarter. EBITDA, on a reported basis, fell around 18% year over year to $723 million. Combined polyolefin results decreased roughly $165 million year over year.

Sales from the Olefins & Polyolefins – Europe, Asia, International segment rose 17% year over year to $3,024 million. EBITDA rose around 4% year over year to $529 million. Olefin results improved around $20 million year over year resulting from higher sales volumes and improved ethylene prices.

Intermediates and Derivatives segment sales climbed 26% to $2,150 million in the reported quarter. EBITDA went up roughly 4% year over year to $339 million.

Revenues from the Refining segment surged 42% to $1,353 million. EBITDA was at a loss of $30 million compared with a profit of $14 million recorded in the prior-year quarter. Throughput rose by 16,000 barrels per day in the quarter. The company’s refinery performed planned maintenance on the fluid unit during the quarter.

The Technology segment’s sales fell 9% to $120 million. EBITDA declined 28% year over year to $60 million.

Financials

LyondellBasell ended the quarter with cash and cash equivalents of $485 million, down roughly 63% year over year. Long-term debt fell around 1% year over year to $8,419 million.

LyondellBasell bought back 1.5 million shares during the quarter. Share buybacks and dividends totalled $0.5 billion in the reported quarter.

Outlook

The company said that global olefin and polyolefin industry conditions remain favorable in April. With a lighter maintenance schedule, the company expects to benefit from the full availability of its global assets moving forward.

Price Performance

LyondellBasell has underperformed the Zacks categorized Chemicals-Diversified industry over a year. The company's shares gained 5.8% during the period while the industry saw a gain of 18.3%.

Zacks Rank & Key Picks

LyondellBasell is a Zacks Rank #3 (Hold) stock.

Better-placed companies in the chemical space include The Chemours Company (NYSE:CC) , Methanex Corporation (NASDAQ:MEOH) and Kronos Worldwide, Inc. (NYSE:KRO) , all holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected long-term growth of 15.5%.

Methanex has an expected long-term growth of 15%.

Kronos has an expected long-term growth of 5%.

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