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How Albemarle’s 2Q16 Earnings Beat Analyst Estimates

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Aug. 11 2016, Published 7:33 p.m. ET

Albemarle reports 2Q16 earnings

On August 3, 2016, Albemarle (ALB) reported its 2Q16 earnings after Market hours. It reported adjusted EPS (earnings per share) of $1.09, beating Wall Street analysts’ estimate of $1. EPS increased by 29.8% on a YoY (year-over-year) basis due to organic business growth, a lower effective tax rate, and lower interest costs.

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Stock price movement

On August 4, 2016, the day after the earnings release, Albemarle stock fell 2.2% from its previous day’s closing price of $83.99. On August 4, the SPDR S&P Dividend ETF (SDY) rose 0.1%. It has invested 0.6% of its holdings in ALB.

Since the beginning of 2016, ALB has risen 46.4% as of August 9, 2016. Below are the year-to-date (or YTD) returns of Albemarle’s peers as of August 9, 2016:

  • FMC (FMC): rose 22.5%
  • LyondellBasell Industries (LYB): fell 14.2% but fell more after its 2Q16 earnings report
  • W.R. Grace (GRA): fell 23.2% and hasn’t recovered from Market volatility since the beginning of the year

EPS guidance

Albemarle increased its guidance on adjusted EPS (earnings per share) for 2016 to $3.35–$3.60 against its earlier guidance of $3.25–$3.50. The company increased its outlook since it’s expecting growth from its Lithium and Advanced Materials segment, its Refining Solutions segment, and its Bromine Specialties segment. It also increased its outlook due to a lower effective tax rate.

In this series, we’ll look at Albemarle’s 2Q16 earnings. We’ll also look at its valuation compared to its peers. In the next part, we’ll take a look at Albemarle’s revenue.

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