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LyondellBasell’s Q3 Top and Bottom Line Beat the Estimates

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LyondellBasell’s third-quarter revenues

On October 30, LyondellBasell (LYB) reported its third-quarter revenues of $10.15 billion, which reflect an increase of 19.25% YoY (year-over-year). The company reported revenues of $8.52 billion in the third quarter of 2017. LyondellBasell beat analysts’ consensus revenue estimate of $9.84 billion.

The company’s revenue growth was driven by higher volumes and improved prices. All of LyondellBasell’s reporting segments grew during the third quarter. The Refinery segment’s revenues increased ~49.6% YoY.

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Third-quarter adjusted EPS

LyondellBasell reported an adjusted EPS of $2.96—an increase of 22.8% YoY. In the third quarter of 2017, the company reported an adjusted EPS of $2.41. LyondellBasell beat analysts’ estimate of $2.69. The company’s adjusted EPS excluded the A. Schulman acquisition-related cost of $0.11 per share.

LyondellBasell’s earnings growth was mainly driven by higher revenue growth, lower interest expenses, and share buybacks. During the third quarter, the company bought back 3.2 million shares. At the end of the third quarter, LyondellBasell’s outstanding common shares stood at 387.17 million—compared to 395.88 million in the third quarter of 2017.

Outlook and stock price

LyondellBasell expects the growth to be driven by the A.Schulman acquisition through synergies. The company plans to advance its US growth projects. LyondellBasell aims to achieve higher operational and business improvements in the derivatives, refining, and technology segments.

The market has reacted positively to LyondellBasell’s earnings. At the time of writing this article, LyondellBasell’s stock price was trading 0.9% higher. Olin (OLN), Celanese (CE), and Eastman Chemical (EMN) rose 3.0%, 0.9%, and 2.1%, respectively.

Investors could hold LyondellBasell indirectly by investing in the Invesco S&P 500 Equal Weight Materials ETF (RTM), which held 4.10% of its portfolio in the stock as of October 29.

Soon, we’ll publish a detailed series on LyondellBasell’s third-quarter earnings results. Stay tuned!

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