LyondellBasell (LYB), which emerged from Chapter 11 bankruptcy in 2010, is among the leading plastics, chemical and refining companies globally. The company’s products are used across a bevy of industries including electronics, automotive parts, packaging, construction materials and biofuels. LyondellBasell is a leading producer of olefins and polyolefins globally.
LyondellBasell is executing its expansion projects to leverage the U.S. natural gas liquids (NGLs) advantage. It remains on track with its ethylene expansion projects across its Channelview, La Porte and Corpus Christi facilities in Texas which benefit from shale gas production.
However, LyondellBasell faces volatility in raw material and energy costs that account for a major portion of its operating costs. Lower oil prices are weighing on its margins.
Let’s have a quick look at this Netherlands-based chemical giant’s first-quarter release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for LyondellBasell for the first quarter has been stationary over the past week. LyondellBasell has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average beat of 9.51%. Investors have been eagerly awaiting LyondellBasell’s latest earnings report to see whether it starts 2015 with an outperformance.
Earnings Beat
LyondellBasell logged adjusted earnings of $2.54 per share that topped the Zacks Consensus Estimate of $1.94.
Revenues Miss
LyondellBasell recorded revenues of $8,185 million, down roughly 26% year over year. That missed the Zacks Consensus Estimate of $9,505 million. Lower crude oil pricing hurt prices of the company’s products in the quarter.
Key Stats/Developments to Note
LyondellBasell returned $1.69 billion to its shareholders during the quarter through share repurchases and dividends. Moving into the second quarter, the company is seeing market conditions in its Olefins and Polyolefins unit to be consistent with the first. The company expects its Intermediate and Derivatives segment to gain from normal seasonal trends in the second quarter. While refining industry spreads have declined versus the first quarter they remain healthy.
Zacks Rank
LyondellBasell currently has a Zacks Rank #3 (Hold), but that could change following the company’s earnings report which was just released.
Market Reaction
LyondellBasell’s shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.