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Albemarle Corporation ALB is slated to release first-quarter 2025 results after the closing bell on April 30.
The company missed the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered a negative earnings surprise of 160.2%, on average. It posted a negative earnings surprise of 122.5% in the last reported quarter. ALB is likely to have benefited from its cost and productivity actions in the first quarter amid headwinds from softer lithium market prices.
ALB’s shares have lost 51.3% over the past year compared with the Zacks Chemicals Diversified industry’s 24.4% decline.
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Let’s see how things are shaping up for this announcement.
What Do ALB’s Revenue Estimates Say?
The Zacks Consensus Estimate for revenues for Albemarle for the to-be-reported quarter stands at $1,171.4 million, reflecting a decline of around 13.9% from the year-ago quarter.
The consensus estimate for net sales for the Energy Storage unit for the first quarter is pegged at $588.6 million, reflecting a year-over-year decline of 26.5%.
The Zacks Consensus Estimate for net sale for the Specialties unit is pinned at $330 million, suggesting a year-over-year rise of 4.4%.
The Zacks Consensus Estimate for net sales for the Ketjen unit stands at $243.9 million, flat year over year.
Factors to Watch for ALB Stock
The benefits of ALB’s cost-saving, pricing and productivity initiatives are expected to get reflected in the March quarter. Its cost and productivity actions are expected to have supported margins in the quarter. Efforts to drive operating efficiency and improve the utilization of raw materials are likely to have aided the company’s performance.
Albemarle is taking actions to cut costs, optimize its conversion network and increase efficiencies to preserve its long-term competitive position. It has made progress with the earlier-announced comprehensive review of its cost and operating structure. It expects the annual run-rate cost savings related to the comprehensive review to be in the range of $300-$400 million.
ALB achieved more than 50% run rate of the cost improvement target at the end of 2024 and expects to achieve a full run rate by the end of 2025. Roughly $150 million of the target is related to manufacturing cost opportunities.
Soft lithium market prices are likely to have impacted the company’s performance. Lithium prices have declined amid slowing demand growth for EVs, inventory glut and increased supply. The uncertain macroeconomic environment and high interest rates have weighed on demand. Weaker lithium prices are likely to have hurt ALB’s top line and margins in the first quarter.