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Albemarle’s 4Q17 Revenue Grew on All-Around Performance

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Albemarle’s 4Q17 revenues

Albemarle (ALB) reported revenues of $857.8 million in 4Q17, an increase of 23.1% on a YoY (year-over-year) basis. In 4Q16, its revenues were $696.7 million. Its reported revenues are on a continuing business operations basis. ALB beat analysts’ estimate of $795.5 million.

The increase in ALB’s revenue was primarily driven by growth in all its reporting segments, led by Lithium and Advanced Materials, Refining Solutions, and Bromine Specialties. We’ll look at each of these segments in detail in the rest of this series. Revenue growth was helped by higher pricing and higher volumes in all these segments. The continued weakness in the US dollar led to a favorable currency hedge and resulted in the surge of ALB’s revenue.

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Luke Kissam, Albemarle’s chair, president, and CEO, said, “We made progress on our lithium capital projects consistent with our plans and continued to demonstrate our focus on portfolio management with the announced divestiture of our polyolefin catalysts and components business. After surpassing our financial goals for 2017, we are excited to continue growing in 2018. Our goals for 2018 are clear: deliver the cash flow needed to fund growth and execute on our capital plan to meet the increasing needs of our customers.”

Outlook and guidance

For fiscal 2018, Albemarle expects its sales to be $3.2 billion–$3.4 billion, driven by continued growth in the demand for lithium and cleaner fuels. To meet the growing demand, ALB’s new technology to extract more lithium is expected to improve its production capacity along with its expansion plans. However, its revenue might be adversely impacted due to the divestiture of polyolefin catalysts and components to W.R. Grace (GRA). The deal is expected to be completed in 1Q18.

Investors can invest in the Guggenheim S&P 500 Equal Weight Materials ETF (RTM) for an indirect exposure to Albemarle. RTM has 3.3% of its portfolio invested in ALB. The fund also provides exposure to Mosaic (MOS) and Eastman Chemical (EMN) with weights of 4.6% and 4.3%, respectively, as of February 27, 2018.

In the next few parts, we’ll look at ALB’s reporting segment performances for 4Q17.

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