Albemarle’s Q1 Adjusted EPS Beat Wall Street Estimate

Albemarle’s adjusted EPS for Q1 2019

Albemarle (ALB) announced its first-quarter earnings after the market closed on May 8. The company reported adjusted EPS of $1.36 in the first quarter, a decline of 5.4% on a year-over-year basis. In the first quarter of 2018, Albemarle reported adjusted EPS of $1.30. ALB’s Q1 2019 adjusted EPS beat the Wall Street estimate of $1.22.

Albemarle’s Q1 Adjusted EPS Beat Wall Street Estimate

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Albemarle’s adjusted EPS was adversely impacted by the divestiture of the polyolefin catalysts and components portion of the Performance Catalyst Solutions (or PCS) business to W.R. Grace & Co. (GRA) during 2018. Further, the increase in input cost resulted in higher cost of goods sold (or COGS). ALB reported Q1 2019 COGS at $548.57 million, representing 65.9% of the revenue, while COGS in Q1 2018 was 62.9%, which implies an increase of 300 basis points on a year-over-year basis.

Similarly ALB’s selling, general, and administrative expenses (or SG&A) also increased by 130 basis points on a year-over-year basis. Unfavorable foreign currency was another reason for the decline in ALB’s adjusted EPS.

Guidance

Albemarle maintained its full-year outlook for fiscal 2019. ALB expects its fiscal 2019 adjusted EPS in the range of $6.10 to $6.50.

Stock price reaction

Since the earnings were announced after the markets closed, the next day, ALB stock remained flat and closed at $72.61. Peers FMC (FMC) and Sociedad Química y Minera de Chile (SQM) rose 0.95% and 0.2%, respectively.

Investors can indirectly hold Albemarle by investing in the Lithium ETF (LIT), which has invested 4.3% of its portfolio in Albemarle as of May 9.