LyondellBasell's Earnings Lag Estimates, Sales Beat in Q1

LyondellBasell Industries N.V. LYB recorded a first-quarter 2025 profit of $177 million or 54 cents compared with the year-ago quarter's profit of $473 million or $1.44 per share.

LYB posted adjusted earnings of 33 cents, down 74.8% from the year-ago quarter figure of $1.31. It missed the Zacks Consensus Estimate of 36 cents.

The company’s net sales in the first quarter were $7,677 million, which beat the Zacks Consensus Estimate of $7,593.3 million. Net sales decreased around 7.6% from $8,304 million in the prior-year quarter.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

LYB’s Segment Highlights

In the Olefins & Polyolefins — Americas division, revenues decreased roughly 13.6% year over year to $2,481 million in the first quarter. The figure missed the Zacks Consensus Estimate of $2,737.8 million. EBITDA fell by $270 million from the first quarter of 2024. The decline in Olefins results was about $120 million, mainly due to reduced ethylene margins caused by higher energy costs and lower prices for co-products.

The Olefins & Polyolefins — Europe, Asia, the international segment recorded revenues of $2,600 million, down 5.3% from the prior-year quarter. The figure beat the Zacks Consensus Estimate of $2,550.8 million. Olefins results declined by around $20 million year over year, primarily due to reduced margins from increased feedstock costs. This was partially offset by higher ethylene prices, while lower volumes from unplanned downtime adversely impacted results.

The Advanced Polymer Solutions segment posted revenues of $908 million, down 5.9% from $965 million in the prior-year quarter. The figure lagged the Zacks Consensus Estimate of $948.4 million. EBITDA rose by $11 million year over year, mainly due to improved sales margins and better cost efficiency.

Revenues in the Intermediates and Derivatives segment decreased around 11.1% on a year-over-year basis to $2,298 million. The figure missed the Zacks Consensus Estimate of $2,472.9 million. Propylene Oxide & Derivatives results fell by about $25 million from the previous period, primarily due to reduced margins on raw materials and derivatives.

The Technology segment’s revenues were $120 million in the reported quarter, down around 37.5% year over year. The figure lagged the Zacks Consensus Estimate of $175.4 million. EBITDA fell by $66 million from the first quarter of 2024. This decline was due to reduced licensing revenues from fewer contracts, along with lower catalyst margins and volumes driven by weaker market sentiment.

LYB’s Financials

In the first quarter, the company used $579 million in cash from operating activities and surpassed its long-term cash conversion target over the past year. It maintained a balanced capital allocation strategy, investing $483 million in capital expenditures and returning $543 million to shareholders through dividends and stock buybacks.

LYB’s Outlook

For the second quarter, the company anticipates improved seasonal demand across most of its business segments. U.S. natural gas and ethane feedstock prices have eased, while lower crude oil costs are benefiting operations in Europe and Asia. Oxyfuels margins are expected to rise as gasoline crack spreads widen during the summer driving season. In Europe, ongoing rapid capacity reductions are projected to enhance the regional supply-demand balance over time. Furthermore, a more constructive stance on economic and regulatory policies in Europe is contributing to cautious optimism. Despite ongoing economic uncertainty, global demand for packaging is expected to stay firm, supporting essential sectors like food, healthcare and daily consumer goods.

To meet global demand and accommodate planned maintenance, LYB expects second-quarter operating rates of 85% for its North American olefins and polyolefins (O&P) facilities, 75% for European O&P operations and 85% for Intermediates & Derivatives (I&D) assets.

LYB’s Price Performance

Shares of LyondellBasell have lost 40.6% in the past year compared with a 25.7% decline of the industry.

LYB’s Zacks Rank & Key Picks

LYB currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks worth a look in the basic materials space include Hawkins, Inc. HWKN, Osisko Gold Royalties Ltd OR and Intrepid Potash, Inc. IPI. While HWKN sports a Zacks Rank #1 (Strong Buy), OR and IPI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hawkins is expected to report first-quarter results on May 21. The consensus estimate for Hawkins’ earnings is pegged at 74 cents. HWKN beat the consensus estimate in one of the last four quarters while missing thrice, with the average earnings surprise being 6.1%. 

Osisko Gold is scheduled to release first-quarter results on May 7. The Zacks Consensus Estimate for OR’s first-quarter earnings is pegged at 15 cents. OR has a trailing four-quarter earnings surprise of 4.4%, on average.  

Intrepid Potash is slated to release first-quarter results on May 5. The consensus estimate for IPI’s first-quarter loss is pegged at 12 cents, stable over the past 60 days.

 

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This article originally published on Zacks Investment Research (zacks.com).

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