LyondellBasell's Q3 Earnings Lag, Sales Surpass Estimates
In This Article:
LyondellBasell Industries N.V. LYB recorded third-quarter 2024 profit of $573 million or $1.75 per share, reflecting a decline of 23.3% from the year-ago quarter's profit of $747 million or $2.29 per share. LYB posted adjusted earnings of $1.88 per share, down 23.6% from the year-ago quarter figure of $2.46. Adjusted earnings missed the Zacks Consensus Estimate of $2.03.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company’s net sales in the third quarter were $10,322 million, which beat the Zacks Consensus Estimate of $10,271.8 million. Net sales decreased around 2.9% from $10,625 million in the prior-year quarter.
LYB saw higher integrated polyethylene margins in North America, driven by favorable ethane and natural gas costs and higher polyethylene prices.
LyondellBasell Industries N.V. Price, Consensus and EPS Surprise
LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote
LYB’s Segment Highlights
In the reported quarter, Olefins & Polyolefins — America’s division revenues increased 3.5% year over year to $2,982 million, missing the Zacks Consensus Estimate of $3,036.3 million.
Olefins & Polyolefins — Europe, Asia the international segment’s revenues increased 14.8% year over year to $2,809 million, missing the Zacks Consensus Estimate of $2,810.4 million.
In the third quarter, Intermediates and Derivatives segment sales were down 12.8% to $2,686 million, missing the Zacks Consensus Estimate of $2,896 million.
The Advanced Polymer Solutions segment's revenues declined 0.3% to $896 million, missing the Zacks Consensus estimate of $964.7 million.
In the Refining segment, sales declined 23% to $2,054 million, beating the Zacks Consensus Estimate of $1,764.9 million. The Technology segment's revenues declined 33% to $146 million, missing the Zacks Consensus Estimate of $177.8 million.
LYB’s Financials
LyondellBasell generated $670 million in cash from operating activities in the third quarter and achieved more than 80% cash conversion over the past year. The company maintains a disciplined approach to capital allocation, investing $368 million in capital expenditures and returning $479 million to shareholders via dividends and share repurchases. At the conclusion of the third quarter, the company had $2.6 billion in cash and short-term investments and $7.3 billion in accessible liquidity.
LYB’s Outlook
LYB is making headway toward establishing a lucrative Circular and Low Carbon Solutions business, one of the three pillars of its long-term strategy. In the third quarter, it commenced construction on the first commercial-scale plant to use its proprietary and differentiated advanced catalytic recycling technology, MoReTec-1, in Wesseling, Germany. The facility, set to start operations in 2026, aims to aid LYB in producing and marketing at least 2 million metric tons of recycled and renewable polymers yearly by 2030.
The MoReTec-1 unit's electrification reduces greenhouse gas (GHG) emissions by using renewable electricity. LYB, in September, exceeded its aim of procuring 50% of its electricity from renewable sources by 2030, thanks to a new power purchase agreement in the Netherlands.
LYB expects year-end seasonality to result in weaker demand across most businesses in the fourth quarter. Higher sequential natural gas and ethane feedstock costs are expected to moderate North American integrated polyolefins margins during the fourth quarter. Oxyfuels and refining margins are projected to fall with low gasoline crack spreads and the conclusion of the summer driving season.
