Sabic Profit Misses Earnings Estimates on Low Product Prices

(Bloomberg) -- Saudi Basic Industries Corp. said lower prices for petrochemicals dragged first quarter profit down 38.1 percent, missing analyst estimates.

The Middle East’s biggest petrochemicals maker reported 3.41 billion riyals ($910 million) in first quarter profit, Sabic said in a statement. The average of analyst estimates was 4.04 billion riyals, according to data compiled by Bloomberg.

Key Numbers

  • 1Q profit 3.41 billion riyals vs 5.51 billion
    • Estimate 4.04 billion (range 3.21 billion to 4.62 billion)
  • 1Q sales 37.37 billion riyals vs 41.86 billion
    • Estimate 37.57 billion (range 36.16 billion to 39.01 billion)
  • 1Q operating profit 6.15 billion riyals vs 8.95 billion
  • Volumes increased 1% and average prices decreased 8% compared to the fourth quarter

In Depth

  • State-owned Saudi Aramco agreed to buy a majority stake in Sabic, as the company is known, from the kingdom’s sovereign wealth fund.
  • Lower sales were “driven by global slowing demand growth coupled with a slow start of the year and relatively high level of inventories,” Sabic said.
  • Company expects 2019 performance “to be in-line with global petrochemical industry trends.”

Dig Deeper

Shares

  • Stock advanced 6 percent this year. Saudi Tadawul benchmark gained 19 percent.
  • The analyst consensus one-year price target for the company is 127.02 riyals. Shares traded at 123.40 riyals on Thursday.

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