LyondellBasell's (LYB) Earnings & Sales Miss Estimates In Q3

LyondellBasell Industries N.V. (NYSE:LYB) logged net profits of $965 million or $2.85 per share in third-quarter 2019 compared with $1,113 million or $2.85 in the year-ago quarter.

Barring one-time items, adjusted earnings came in at $2.70 per share that missed the Zacks Consensus Estimate of $2.78.

LyondellBasell generated revenues of $8,722 million, down roughly 14.1% year over year. The figure also trailed the Zacks Consensus Estimate of $8,983.2 million.

Consolidated EBITDA declined around 12.6% year over year to $1,513 million.

Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA fell around 7.2% year over year to $653 million. Olefin results rose more than $150 million year over year. Polyolefins results dropped around $215 million, mainly due to lower spread in polyethylene over ethylene. The downside was partly offset by increase in polyolefin volume.

EBITDA in the Olefins & Polyolefins — Europe, Asia, International (EAI) segment rose 11.1% year over year to $291 million. Olefin results increased around $75 million on a year-over-year basis on higher margin and volume. Consolidated polyolefins results increased around $10 million mainly on higher volume.

The Advanced Polymer Solutions (APS) segment’s EBITDA was $102 million in the third quarter compared with $70 million in the year-ago quarter.

EBITDA in the Intermediates and Derivatives segment declined around 22.6% on a year-over-year basis to $390 million. Propylene Oxide & Derivatives results declined around $15 million on a year-over-year basis due to modest decline in volume. The downtick was caused by scheduled maintenance.

EBITDA in the Refining segment amounted to a loss of $6 million against profit of $84 million in the year-ago quarter. Crude throughput was 264,000 barrels per day, up 14.3% year over year.

The Technology segment’s EBITDA fell 15.3% year over year to $83 million.

Financials

LyondellBasell had cash and liquid investments of $1.1 billion at the end of the third quarter.

The company paid out dividends of $351 million during third-quarter 2019. As of Sep 30, 2019, the company had 333 million common shares outstanding.

Outlook

The company continued to benefit from low-cost natural gas liquid feedstocks with favorable prices continuing into October 2019. It expects seasonal softening of demand for the remainder of the year.

The company also expects profitability at its Houston refinery to improve during the fourth quarter. Per LyondellBasell, this is likely to be driven by an increase in demand for low-sulfur marine fuels ahead of the IMO 2020 regulation deadline.

Price Performance

Shares of LyondellBasell have lost 3.7% in the past year compared with the industry’s 27.6% decline.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (NYSE:KGC) , Franco-Nevada Corporation (TSX:FNV) and Kirkland Lake Gold Ltd (TSX:KL) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 210% for 2019. The company’s shares have surged 76.4% in the past year.

Franco-Nevada has a projected earnings growth rate of 39.3% for 2019. The company’s shares have rallied 48.8% in a year.

Kirkland Lake Gold has an estimated earnings growth rate of 93.4% for the current year. Its shares have moved up 132% in the past year.

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