LyondellBasell’s Q1 Earnings Beat Estimates, but Revenue Fell

LyondellBasell’s 2019 first-quarter revenues

On April 26, LyondellBasell (LYB) reported its 2019 first-quarter earnings. It reported adjusted EPS of $2.22, a decrease of 28.0% on a YoY basis. In the first quarter of 2019, the company reported adjusted EPS of $3.11. LyondellBasell beat analysts’ estimate of $2.19. The company’s adjusted EPS excluded a tax benefit and accrued interest acquisition-related costs of $0.16 per share.

LyondellBasell’s Q1 Earnings Beat Estimates, but Revenue Fell

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The decline in LYB’s adjusted EPS is mainly due to the decline in revenues. LYB reported revenue of $8.77 billion in Q1 2019, a decline of 10.1% on a year-over-year basis. In Q1 2018 LYB reported revenue of $9.76 billion. With the exception of the Advanced Polymer Solutions and Technology segments, all other reporting segments posted declines. The increase in Advanced Polymer Solutions is primarily because of the inclusion of revenues from A. Schulman. The decrease in the revenue in other segments is primarily due to the decline in the prices of ethylene.

Outlook

Bob Patel, LyondellBassell’s CEO, said, “In the first few weeks of April we have seen signs of industry improvement. The strength in market sentiment is driving higher margins for our Olefins & Polyolefins – EAI segment. In our Olefins & Polyolefins – Americas segment we are seeing volume improvement as we enter a period of strong seasonal demand. The refining market is also improving with increasing gasoline spreads and wider discounts for heavy sour crude oil. Looking beyond the quarter, we will advance our growth strategy and increase our earnings with a robust pipeline of licensing revenue for 2019 in addition to the third quarter start-up of our world-scale HDPE plant which utilizes our innovative Hyperzone technology.”

Stock price

LYB’s stock price declined marginally by ~0.75%. Peers Westlake Chemical (WLK) and Celanese (CE) were up by 0.75% and 0.44%, respectively, while Eastman Chemical (EMN) fell 0.6%.

Investors can hold LyondellBasell indirectly by investing in the Invesco S&P 500 Equal Weight Materials ETF (RTM), which holds 3.8% of its portfolio in the stock as of April 26.