Sociedad Quimica (SQM) Misses Q2 Earnings Estimates, Tops Sales

Core Viewpoint - Sociedad Quimica y Minera de Chile S.A. (SQM) reported a significant decline in profits and revenues for the second quarter of 2024 compared to the previous year, with earnings falling short of market expectations [1] Financial Performance - SQM's profit for Q2 2024 was $213.6 million, or 75 cents per share, down from$580.2 million, or $2.03 per share, in Q2 2023 [1] - Revenues for the quarter totaled$1,293.6 million, a decrease of approximately 37% year over year, but exceeded the Zacks Consensus Estimate of $1,260.7 million [1] - Cash and cash equivalents at the end of the quarter were$1,033.1 million, down around 22% sequentially, while long-term debt remained flat at $2,946.2 million [5] Segment Highlights - The Lithium and Derivatives segment saw revenues drop nearly 55$664.7 million, despite a 21% increase in sales volumes, due to a 63% reduction in average sales prices [2] - The Specialty Plant Nutrients (SPN) segment generated revenues of $260.5 million, up 5$269.2 million, up around 22% from the prior year, benefiting from higher sales volumes and increased sales prices [3] - Revenues from the Potassium business rose 10% year over year to $73.1 million, supported by higher sales volumes, though partially offset by lower average sales prices [3] - The Industrial Chemicals unit recorded sales of$20.5 million, down around 56% year over year, impacted by significantly lower sales volumes despite higher average sales prices [4] Market Outlook - SQM's production guidance remains unchanged, with expectations to produce approximately 210,000 metric tons of lithium carbonate equivalent [6] - The potassium nitrate market is projected to see total demand rise by nearly 13% compared to 2023, with SQM expecting its sales volumes to increase by close to 20% in 2024 [7] - Iodine demand growth in 2024 is projected at approximately 7% year over year, with SQM expecting iodine sales volumes to exceed 14,500 metric tons [8] - Global demand for potassium is expected to exceed 70 million metric tons by year-end, with SQM anticipating sales volumes to reach 650,000 metric tons in 2024 [9] - Quarterly sales volumes for industrial chemicals are expected to remain steady, with stable market prices anticipated for the remainder of 2024 [10] Stock Performance - SQM's shares have declined by 41.8% over the past year, compared to the industry's decline of 22.1% [11]