Plastics and chemicals company LyondellBasell (LYB 87.78,
+0.81, +0.93%) trades back above its 50-day simple moving average (86.29) on
Friday in reaction to the company’s fourth quarter miss on sales and EBITDA.
LyondellBasell’s miss comes a day after chemical peer DowDuPont (DWDP 53.57, -0.24, -0.45%) missed on sales and gave cautious commentary; specifically, on DWDP’s conference call management stated, “For the full year, we expect sales to be about flat on an as-reported basis impacted by portfolio and currency headwinds. […] We expect operating EBITDA for the year to be slightly down on an as-reported basis.”
In short, investor sentiment into LyondellBasell’s print was already a bit cautious but was exacerbated by an equally soft quarter last night out of peer Eastman Chemical (EMN 81.26, +0.64, +0.79%).
Juxtaposed against EMN and DWDP’s misses and commentary, LyondellBasell’s results perhaps weren’t as bad as feared. Specifically, LyondellBasell holds a positive global outlook for 2019 despite market volatility.
In the fourth quarter LyondellBasell reported earnings per share of $1.79 on sales which fell 2.8% to about $8.88 bln, both of which missed market expectations. The stock moves higher despite a year/year decline in fourth quarter EBITDA; specifically, EBITDA fell to $1.21 bln from about $1.73 bln last year.
LyondellBasell outlined an “extraordinary” fall in the price of crude oil in the fourth quarter, unusual operational events, and a very difficult refining market as impetus for a weaker period. As oil prices fell by 40% during the fourth quarter, LyondellBasell’s non-U.S. Olefins and Polyolefins business experienced declining demand. Customers delayed orders and destocked inventories in expectations of lower pricing.
All told, LyondellBasell appears to be taking a more favorable view on 2019 than are its peers. The stock still boasts gains of about 5.6% on the year.
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