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.
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.