Albemarle Corporation (NYSE:ALB) Q4 2024 Earnings Call February 13, 2025 8:00 AM ET Company Participants Meredith Bandy - VP, IR and Sustainability Kent Masters - Chairman and CEO Neal Sheorey - EVP and CFO Eric Norris - EVP and CCO Conference Call Participants Patrick Cunningham - Citigroup Rock Hoffman - Bank of America Unidentified Analyst - Scotiabank David Begleiter - Deutsche Bank Jeffrey Zekauskas - J.P. Morgan John Roberts - Mizuho Securities Joel Jackson - BMO Capital Markets Vincent Andrews - Morg ...

Core Viewpoint - Albemarle Corporation reported a significant decline in earnings and revenues for the fourth quarter of 2024, indicating challenges in its Energy Storage segment and overall market conditions [1][2][5]. Financial Performance - Earnings per share for Q4 2024 were 29 cents, a recovery from a loss of $5.26 per share in the same quarter last year [1]. - Adjusted loss for the quarter was $1.09 per share, which was worse than the Zacks Consensus Estimate of a loss of 49 cents [1]. - Revenues fell approximately 48% year over year to $1,231.7 million, missing the Zacks Consensus Estimate of $1,311.5 million [2]. Segment Performance - The Energy Storage unit's sales dropped around 63% year over year to $616.8 million, missing the consensus estimate of $738 million due to reduced pricing and volumes [3]. - The Specialties segment recorded sales of $332.9 million, down about 2% year over year, also below the consensus estimate of $342 million [4]. - The Ketjen unit's revenues were $281.9 million, down roughly 17% year over year, falling short of the consensus estimate of $300 million [4]. Full-Year Results - For the full year 2024, the reported loss was $11.20 per share, compared to earnings of $13.36 per share the previous year [5]. - Net sales for FY24 declined around 44% year over year to $5,377.5 million [5]. Financial Position - At the end of 2024, cash and cash equivalents were approximately $1,192.2 million, up around 34% year over year [6]. - Long-term debt was approximately $3,118.1 million, down around 12% from the prior year [6]. - Cash from operations for FY24 was $702 million, down around 47% year over year [6]. Outlook - The company is implementing cost-cutting measures and optimizing its conversion network to enhance efficiencies and maintain competitive positioning [7]. - Expected capital expenditures for FY25 have been reduced by $100 million, now projected to be in the range of $700-$800 million [7]. - Depreciation and amortization expenses are anticipated to be between $630-$670 million for 2025 [8]. Stock Performance - Albemarle's shares have decreased by 31.7% over the past year, contrasting with a 0.5% rise in the Zacks Chemicals Diversified industry [9].

Company Performance - Albemarle reported a quarterly loss of $1.09 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.49, and down from earnings of $1.85 per share a year ago, representing an earnings surprise of -122.45% [1] - The company posted revenues of $1.23 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 6.08%, and down from $2.36 billion in the same quarter last year [2] - Over the last four quarters, Albemarle has not surpassed consensus EPS estimates and has topped consensus revenue estimates only twice [2] Stock Performance - Albemarle shares have declined approximately 12.1% since the beginning of the year, contrasting with the S&P 500's gain of 3.2% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.34 on revenues of $1.28 billion, and for the current fiscal year, it is $1.44 on revenues of $5.32 billion [7] Industry Outlook - The Zacks Industry Rank indicates that the Chemical - Diversified sector is currently in the bottom 11% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8] - The performance of Albemarle's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Acquisitions and Investments - Albemarle acquired the remaining 40% ownership of the Kemerton lithium hydroxide processing facility for approximately $380 million, with the transaction effective retroactively to April 1, 2022[60]. - The acquisition of Guangxi Tianyuan New Energy Materials Co., Ltd. was completed for approximately $200 million, with a lithium processing plant capable of producing up to 25,000 metric tons of lithium carbonate equivalent annually[61]. - The restructuring of the MARBL Lithium Joint Venture reduced Albemarle's ownership interest from 60% to 50% as of October 18, 2023, impacting future revenue recognition from this joint venture[548]. - The company completed the acquisition of Guangxi Tianyuan New Energy Materials Co., Ltd. for approximately $200 million in cash, which included a deferral of about $29 million[601]. - The fair value of the assets acquired in the Guangxi Tianyuan acquisition included property, plant, and equipment valued at $106.6 million and other intangibles valued at $16.3 million[602]. - The restructuring of the MARBL joint venture allowed the company to acquire 100% ownership of the Kemerton lithium hydroxide processing facility, with a cash payment of approximately $380 million[626]. Financial Performance - The company’s net sales for the year ended December 31, 2024, were $5,377.5 million, a decrease of 44.5% compared to $9,617.2 million in 2023[538]. - The gross profit for 2024 was $62.5 million, significantly down from $1,185.9 million in 2023, indicating a gross margin decline[538]. - The company reported a net loss of $1,135.5 million for 2024, compared to a net income of $1,670.5 million in 2023, reflecting a substantial downturn in profitability[538]. - Comprehensive loss income for 2024 was $1,348.9 million, contrasting with comprehensive income of $1,702.8 million in 2023[541]. - The company reported a net loss of $1,179,449,000 for the year ended December 31, 2023, compared to a net income of $1,573,476,000 in 2022[545]. - The company reported accumulated other comprehensive loss of $(742,062,000) as of December 31, 2024[545]. - For the year ended December 31, 2024, Albemarle Corporation reported a net loss of $1,135.5 million compared to a net income of $1,670.5 million in 2023, representing a significant decline in profitability[547]. Cash Flow and Liquidity - Cash flows from operating activities for 2024 were $702.1 million, down from $1,325.3 million in 2023, indicating a decrease of approximately 47%[547]. - The company’s cash and cash equivalents at the end of 2024 were $1,192.2 million, an increase of $302.3 million from $889.9 million at the end of 2023[547]. - The company issued 2,300 shares of mandatory convertible preferred stock in 2024, with a stated value of $1,000 each, totaling $2,235,105 thousand[543]. - The company received $2,236.8 million from the issuance of mandatory convertible preferred stock in 2024, which was a new financing activity not present in the previous year[547]. - The company repaid a net amount of $620.0 million of commercial paper notes during the year ended December 31, 2024, using proceeds from the issuance of mandatory convertible preferred stock[658]. Debt and Liabilities - As of December 31, 2024, Albemarle had variable interest rate borrowings of $27.5 million, representing 1% of total outstanding debt, with an average interest rate of 0.33%[514]. - Long-term debt decreased from $3,541,002 thousand in 2023 to $3,118,142 thousand in 2024, a decline of approximately 12.0%[543]. - The total long-term debt maturities for 2025 are projected at $398.5 million, with significant amounts due in subsequent years[647]. - The net pension liability decreased to $7.674 billion in 2024 from $8.771 billion in 2023, reflecting a reduction of approximately 12.5%[665]. - Total noncurrent liabilities increased from $769.100 million in 2023 to $819.204 million in 2024[688]. Environmental and Sustainability Goals - Albemarle aims to achieve net-zero carbon emissions by 2050, with a target to reduce scope 1 and 2 carbon intensity by 35% by 2030 from a 2019 baseline[55]. - The company plans to reduce freshwater usage intensity by 25% by 2030 in areas of high water risk, such as Chile and Jordan[56]. - The company is committed to responsible management of natural resources and aims to maximize the recovery of extracted minerals while preserving local environments[58]. Research and Development - Research and development expenses increased slightly to $86.7 million in 2024 from $85.7 million in 2023, showing continued investment in innovation[538]. - Research and development expenses are primarily personnel-related and are expensed as incurred, supporting contract research and custom manufacturing businesses[571]. Inventory and Assets - Total assets decreased from $18,270,652 thousand in 2023 to $16,609,649 thousand in 2024, a decline of approximately 9.1%[543]. - Current assets fell from $5,216,919 thousand in 2023 to $3,842,262 thousand in 2024, representing a decrease of about 26.4%[543]. - Inventories decreased from $2,161,287 thousand in 2023 to $1,502,531 thousand in 2024, a reduction of about 30.5%[543]. - Finished goods inventory decreased from $1,624.9 million in 2023 to $912.7 million in 2024, a reduction of approximately 44%[611]. - Total inventory value dropped from $2,161.3 million in 2023 to $1,502.5 million in 2024, reflecting a decline of about 30%[611]. Compliance and Legal Matters - The company finalized agreements to resolve matters with the DOJ and SEC in September 2023[696]. - A total of $218.5 million was paid in aggregate fines, disgorgement, and prejudgment interest to the DOJ and SEC[696]. - The resolution does not include a compliance monitorship, but the company has agreed to ongoing compliance reporting obligations[697]. - The conduct related to the resolution occurred prior to 2018[696]. - The company voluntarily self-reported potential violations of the U.S. Foreign Corrupt Practices Act[695].

Financial Performance - Fourth quarter net sales were $1.2 billion, a decline of 47.7% year-over-year, primarily due to lower pricing and volumes in Energy Storage[4] - Full year net sales totaled $5.4 billion, with Energy Storage sales volumes increasing by 26%; however, the company reported a net loss of $1.2 billion for the year[4] - Net sales for Q4 2024 were $1,231.7 million, a decrease from $2,356.2 million in Q4 2023, representing a decline of 47.8% year-over-year[30] - Total net sales for the year ended December 31, 2024, were $5,377,526, a decrease from $9,617,203 in 2023, representing a decline of approximately 44%[34] - Energy Storage segment net sales for the year ended December 31, 2024, were $7,078,998, compared to $3,015,121 in 2023, reflecting an increase of approximately 134%[34] - Specialties segment net sales decreased to $1,325,983 in 2024 from $1,482,425 in 2023, a decline of about 11%[34] - Ketjen segment net sales slightly decreased to $1,036,422 in 2024 from $1,055,780 in 2023, a decrease of approximately 2%[34] Profitability and Loss - Adjusted EBITDA for the fourth quarter was $251 million, reflecting year-over-year increases across all business segments, with Energy Storage up $290 million[4] - Adjusted EBITDA for the year ended December 31, 2024, was $1,139,778, down from $3,545,988 in 2023, indicating a decrease of about 68%[34] - Gross profit for Q4 2024 was $138.2 million, compared to a loss of $704.1 million in Q4 2023, indicating a significant recovery[30] - The company reported a net income attributable to Albemarle Corporation of $75.3 million for Q4 2024, a recovery from a loss of $617.7 million in Q4 2023[30] - Basic earnings per share attributable to common shareholders for Q4 2024 was $0.29, compared to a loss of $5.26 in Q4 2023[30] - Adjusted net loss attributable to common shareholders for the three months ended December 31, 2024, was $(127,899) thousand, compared to $(609,525) thousand in 2023[39] Cash Flow and Liquidity - As of December 31, 2024, Albemarle had estimated liquidity of approximately $2.8 billion, including $1.2 billion in cash and equivalents[24] - Cash and cash equivalents increased to $1.2 billion in 2024, up from $889.9 million in 2023, showing a growth of 34.2%[31] - Net cash provided by operating activities for the year was $702,068, down from $1,325,321 in 2023, a decline of about 47%[33] - Net cash used in investing activities was $1,574,438 for the year, compared to $2,781,160 in 2023, a decrease of approximately 43%[33] - Cash and cash equivalents at the end of the period were $889,900, compared to $1,192,230 in 2023, a decrease of about 25%[33] Expenses and Liabilities - Research and development expenses for the year ended December 31, 2024, were $86.7 million, slightly up from $85.7 million in 2023[30] - Total current liabilities decreased to $1.97 billion in 2024, down from $3.56 billion in 2023, a reduction of 44.5%[31] - The company’s long-term debt decreased to $3.12 billion in 2024 from $3.54 billion in 2023, a decline of 11.9%[31] - Selling, general and administrative expenses included $2.3 million for facility closure expenses in Germany and $1.9 million for environmental reserves[49] Taxation - The effective income tax rate for Q4 2024 was 13.8%, compared to (12.9)% in the same period of 2023, influenced by changes in geographic income mix[10] - For the year ended December 31, 2024, the company reported a net loss before income taxes of $1,763.8 million, with an effective income tax rate of (4.9)%[49] - Discrete net tax benefits for the year ended December 31, 2024 amounted to $117.5 million, or $1.00 per share[47] - The company experienced a significant increase in net tax benefits from $1.3 million in 2023 to $111.4 million in 2024[47] Future Outlook - The company expects 2025 capital expenditures to be reduced by over 50% to a range of $700 million to $800 million, down from $1.7 billion in 2024[21] - The company anticipates Energy Storage volumes to increase by 0% to 10% in 2025 compared to 2024, depending on market conditions[14] - The company anticipates continued fluctuations in lithium market prices and plans to adjust capital expenditures accordingly for future projects[29]

Core Insights - Albemarle Corporation reported significant financial results for Q4 and full year 2024, with net sales declining by 48% year-over-year to $1.2 billion, primarily due to lower pricing and volumes in Energy Storage [4][6] - The company achieved a net income of $75 million for Q4 2024, a substantial increase from a loss of $618 million in Q4 2023, driven by lower costs and tax benefits [6][9] - Adjusted EBITDA for Q4 2024 was $251 million, reflecting a year-over-year increase of $386 million, attributed to favorable volume growth and productivity improvements [6][9] Financial Performance - Q4 2024 net sales were $1,231.7 million, down from $2,356.2 million in Q4 2023, marking a 47.7% decline [4] - Net income attributable to Albemarle Corporation for Q4 2024 was $75.3 million, compared to a loss of $617.7 million in Q4 2023, representing a 112.2% increase [4][6] - Adjusted EBITDA for Q4 2024 was $250.7 million, up from a loss of $134.9 million in Q4 2023, indicating a 285.8% improvement [4][6] Segment Performance - Energy Storage segment net sales for Q4 2024 were $616.8 million, a decrease of 63.2% from $1,675.1 million in Q4 2023, primarily due to lower pricing and volumes [8][11] - Specialties segment net sales decreased by 2% to $332.9 million, while adjusted EBITDA increased by 144.2% to $72.9 million, driven by productivity benefits [12] - Ketjen segment net sales fell by 17.4% to $281.9 million, but adjusted EBITDA rose by 14.4% to $35.8 million, supported by a favorable product mix [13] Cash Flow and Capital Expenditures - Full year cash from operations for 2024 was $702 million, representing over 60% operating cash flow conversion, primarily driven by working capital management [9] - Capital expenditures for 2024 were $1.7 billion, down by $463 million compared to the previous year, reflecting a strategic reduction in spending [9][23] - The company plans to further reduce capital expenditures in 2025 to a range of $700 million to $800 million, more than 50% lower than 2024 [9][22] 2025 Outlook - Albemarle anticipates a range of net sales for 2025 between $4.9 billion and $5.2 billion, with adjusted EBITDA expected to be between $0.8 billion and $1.0 billion [16][18] - The company projects Energy Storage volumes to increase by 0% to 10% in 2025 compared to 2024, depending on market conditions [14] - The average lithium market price is expected to range from $12 to $15 per kg LCE in H1 2024, down from approximately $20 in Q4 2023 [16][18] Balance Sheet and Liquidity - As of December 31, 2024, Albemarle had estimated liquidity of approximately $2.8 billion, including $1.2 billion in cash and equivalents [25] - Total debt stood at $3.5 billion, with a net debt to adjusted EBITDA ratio of approximately 2.6 times [25]

Take advantage of the currently offered discount on annual memberships and give CIP a try. The offer comes with a 11 month money guarantee , for first time members.Conservative Income Portfolio targets the best value stocks with the highest margins of safety. The volatility of these investments is further lowered using the best priced options. Our Enhanced Equity Income Solutions Portfolio is designed to reduce volatility while generating 7-9% yields.There is nothing new under the sun. All markets follow a ...

The upcoming report from Albemarle (ALB) is expected to reveal quarterly loss of $0.41 per share, indicating a decline of 122.2% compared to the year-ago period. Analysts forecast revenues of $1.38 billion, representing a decrease of 41.6% year over year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 18.2% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Ahead of a company's ...

Albemarle Corporation (ALB) is slated to release fourth-quarter 2024 results after the closing bell on Feb. 12.See the Zacks Earnings Calendar to stay ahead of market-making news.The company missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while beating once. In this timeframe, it delivered a negative earnings surprise of 107.8%, on average. It posted a negative earnings surprise of 400% in the last reported quarter. ALB is likely to have benefited from healthy lithium ...

Wall Street expects a year-over-year decline in earnings on lower revenues when Albemarle (ALB) reports results for the quarter ended December 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February 12. On ...