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LyondellBasell (LYB) to Post Q3 Earnings: What's in Store?

LyondellBasell's (LYB) Q3 performance is likely to have benefited from strong consumer-driven demand and continued recovery in the durable goods market.

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This story originally appeared on Zacks

LyondellBasell Industries N.V. LYB is set to release third-quarter 2021 results on Oct 29, before the opening bell.

- Zacks

LyondellBasell’s earnings beat the Zacks Consensus Estimate in all of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 27.7%, on average. The company posted an earnings surprise of 8.1% in the last reported quarter. The third-quarter performance is likely to reflect favorable market trends and higher demand for its products, backed by a recovery in the global economy.

Shares of LyondellBasell have gained 40.8% in the past year compared with a 32.4% rise of the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts an earnings beat for LyondellBasell this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Earnings ESP for LyondellBasell is +0.61%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $5.78. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LyondellBasell currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

What do the Estimates Say?

The Zacks Consensus Estimate for third-quarter consolidated sales is pegged at $11,997 million, which suggests an increase of around 77% year over year.

The Zacks Consensus Estimate for sales in the Olefins & Polyolefins — Americas unit is currently pegged at $3,929 million, which suggests an increase of 113.5% year over year.

The Zacks Consensus Estimate for sales in the Olefins & Polyolefins — Europe, Asia, International segment is currently pegged at $3,207 million, which suggests an increase of 61.8% year over year.

The consensus mark for sales in the Intermediates and Derivatives segment is currently pegged at $2,588 million, suggesting an increase of 68.3% year over year.

The Zacks Consensus Estimate for sales in the Advanced Polymer Solutions segment is pegged at $1,282 million, indicating a 27.7% year-over-year rise.

The Zacks Consensus Estimate for sales in the Refining segment is currently at $1,941 million, which indicates an increase of 76.3% year over year.

The consensus mark for sales in the Technology segment is currently pegged at $194 million, which indicates flat sales year over year.

Factors at Play in Q3

The company is likely to have gained from strong consumer-driven demand, sustained healthy demand from the packaging market and continued recovery in the durable goods market in the quarter to be reported. It is expected to have benefited from higher polyethylene margins in the quarter. The margins are expected to have been driven by consistently high demand and low inventories.

The company is likely to have benefited from strength in demand and margins improvement in the Olefins & Polyolefins-Americas segment in the third quarter. Margins in the Olefins & Polyolefins - Europe, Asia, International segment is likely to have been driven by strong demand and tight markets.

It is also likely to have witnessed higher margins in the Advanced Polymer Solutions segment in the quarter, backed by continued price improvements. Strong demand for durable goods along with improved transportation fuels demand are also expected to have aided performance in the Intermediates and Derivatives unit.

A recovery in demand for gasoline is expected to have contributed to improved margins in the Refining business in the quarter to be reported.

The company is also expected to have witnessed headwinds stemming from higher feedstock costs in the Advanced Polymer Solutions segment. It is also expected to have faced volume pressure as semiconductor shortages are hurting demand in the polymers serving automotive and electronic end markets.

LyondellBasell Industries N.V. Price and EPS Surprise

 

LyondellBasell Industries N.V. Price and EPS Surprise

LyondellBasell Industries N.V. price-eps-surprise | LyondellBasell Industries N.V. Quote

 

Other Stocks That Warrant a Look

Here are some other companies in the basic materials space you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Ternium S.A. TX, scheduled to release earnings on Nov 2, has an Earnings ESP of +9.02% and carries a Zacks Rank #2.

The Chemours Company CC, scheduled to release earnings on Nov 4, has an Earnings ESP of +5.70% and carries a Zacks Rank #2.

Albemarle Corporation ALB, scheduled to release earnings on Nov 3, has an Earnings ESP of +8.73% and carries a Zacks Rank #3.



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