Albemarle Earnings Preview

Motley Fool Staff
Updated

Albemarle (NYS: ALB) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Monday. Albemarle is a global developer, manufacturer, and marketer of highly engineered specialty chemicals.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Albemarle, with six of nine rating it a buy and the remainder rating it a hold. Analysts like Albemarle better than competitor Westlake Chemical overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.

  • Revenue forecasts: On average, analysts predict $699.8 million in revenue this quarter. That would represent a rise of 15.7% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.09 per share. Estimates range from $1.04 to $1.14.

What our community says:
CAPS All-Stars are solidly backing the stock with 97.1% assigning it an outperform rating. The community at large concurs with the All-Stars with 94.3% giving it a rating of outperform. Fools are bullish on Albemarle, though the message boards have been quiet lately with only 65 posts in the past 30 days. Despite the majority sentiment in favor of Albemarle, the stock has a middling CAPS rating of three out of five stars.

Management:
Albemarle's profit has risen year over year by an average of 42.1% over the past five quarters. Revenue has now gone up for three straight quarters. The company boosted its gross margin by two percentage points in the last quarter. Revenue rose 23.6% while cost of sales rose 19.8% to $465 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

35.7%

34.0%

33.5%

32.5%

Operating Margin

22.2%

20.1%

20.4%

18.4%

Net Margin

16.1%

15.4%

15.3%

14.0%

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Earnings estimates provided by Zacks.

At the time thisarticle was published

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