Albemarle (ALB) came out with quarterly earnings of $3.45 per share, beating the Jacques consensus estimate of $3.03 per share. That compared to earnings of $0.89 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 13.86%. A quarter ago, it was expected that this specialty chemicals company would post earnings of $1.73 per share when it actually produced earnings of $2.38, up a surprise 37.57%.
In the last four quarters, the company has exceeded consensus EPS estimates by four times.
Jacques Chemical — Diversified industry-related Albemarle posted revenue of $1.48 billion for the quarter ended June 2022, exceeding the Jacques consensus estimate by 7.94%. This compares to revenue from a year ago of $773.9 million. In the last four quarters, the company has topped the consensus revenue estimates four times.
The stability of the stock’s immediate price movement will depend mostly on management’s comments on the earnings call, based on recently released numbers and expectations for future earnings.
Albemarle’s shares have gained about 4.3% since the S&P 500’s -14.2% decline since the start of the year.
What’s next for Albemarle?
While Albemarle has outperformed the market so far this year, the question that springs to investors’ minds is: What’s next for the stock?
There’s no easy answer to this key question, but a reliable measure that can help investors address it is a company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed recently.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings forecast revision. Investors can track such modifications themselves or rely on a tried-and-tested rating tool such as Zacks Rank, which has an impressive track record of harnessing the power of earnings forecast revisions.
Prior to this earnings release, forecast revision trend for Albemarle: Favorable. While the magnitude and direction of the estimate revision may have changed following the company’s recently released earnings report, the current situation translates to Jax Rank #2 (Buy) for the stock. Hence, the stock market is expected to outperform in the near future. You can see the full list of today’s Jax #1 ranked (strong buy) stocks here.
It will be interesting to see how the projections for the coming quarters and the current fiscal turn out in the coming days. The current consensus EPS estimate is $3.59 on revenue of $1.55 billion for the coming quarter and $14.02 on revenue of $6.08 billion for the current fiscal year.
Investors should be mindful of the fact that industry outlook can also have a significant impact on a stock’s performance. In terms of Jax Industry Rank, Chemical – Diversified is currently in the bottom 36% of the 250 plus Zacks industries. Our research shows that the top 50% of JAX-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Orion Engineered Carbons (OEC), another stock in the same industry, has not reported results for the quarter ended June 2022. The result is expected to be released on August 4.
This manufacturer of chemical additive carbon black is expected to post quarterly earnings of $0.65 per share in its upcoming report, which represents a year-over-year change of +4.8%. The consensus EPS estimate for the quarter has remained unchanged over the past 30 days.
Orion Engineered Carbons’ revenue is expected to be $480.4 million, up 19.8% from the year-ago quarter.
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