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LyondellBasell’s 1Q18 Earnings Rise, Stock Gains Marginally

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LyondellBasell’s 1Q18 earnings

Chemical company LyondellBasell (LYB) announced its 1Q18 earnings on April 27, 2018. It reported adjusted EPS (earnings per share) of $3.11 compared to analysts’ estimate of $2.74.

LYB’s reported adjusted EPS rose 57.1% on a YoY (year-over-year) basis.

The company’s earnings growth was primarily the result of higher revenue growth, better operating expenses as a percentage of sales, and share buybacks. LYB reported its cost of goods sold (or COGS) at $8.01, which represented 82% of its sales. In 1Q17, its COGS stood at 82.9% of sales, implying a rise of 90 basis points on a YoY basis. However, its selling, general, and administrative expenses remained more or less the same.

In addition, in 1Q18, LYB bought back 1.3 million common outstanding shares. As a result, at the end of 1Q18, LYB had 395.8 million common outstanding shares compared to 402.5 million outstanding shares in 1Q17.

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Stock price reaction

Although LyondellBasell’s 1Q18 earnings beat analysts’ estimates, its stock price rose only marginally. LYB stock gained a mere 0.17% and closed at $106.67 on April 27. On the same day, peers Eastman Chemical (EMN), Olin (OLN), and Westlake Chemical (WLK) fell 1.2%, 0.3%, and 0.8%, respectively.

Investors can invest in LyondellBasell indirectly through the iShares Edge MSCI Multifactor Materials ETF (MATF). MATF invests 7.1% of its portfolio in LyondellBasell as of April 27.

In the next article, we’ll discuss LyondellBasell’s 1Q18 revenue.

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