Stock Analysis on Net
Stock Analysis on Net

Albemarle Corp. (NYSE:ALB)

This company has been moved to the archive! The financial data has not been updated since May 3, 2023.

Common-Size Income Statement 

Albemarle Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net sales 100.00 100.00 100.00 100.00 100.00
Cost of goods sold -58.00 -70.01 -68.20 -64.96 -63.93
Gross profit 42.00% 29.99% 31.80% 35.04% 36.07%
Selling, general and administrative expenses -7.16 -13.27 -13.74 -14.86 -13.22
Research and development expenses -0.98 -1.62 -1.89 -1.62 -2.08
Gain (loss) on sale of business/interest in properties, net -0.11 8.89 0.00 0.00 6.23
Operating profit 33.74% 23.99% 16.17% 18.56% 27.01%
Interest and financing expenses -1.68 -1.85 -2.34 -1.61 -1.55
Other income (expenses), net 1.18 -18.13 -1.89 -1.27 -1.91
Income before income taxes and equity in net income of unconsolidated investments 33.24% 4.02% 11.94% 15.68% 23.55%
Income tax expense -5.34 -0.88 -1.74 -2.46 -4.29
Income before equity in net income of unconsolidated investments 27.91% 3.13% 10.20% 13.23% 19.26%
Equity in net income of unconsolidated investments, net of tax 10.55 2.88 4.08 3.61 2.64
Net income 38.46% 6.01% 14.27% 16.84% 21.90%
Net income attributable to noncontrolling interests -1.71 -2.29 -2.26 -1.98 -1.35
Net income attributable to Albemarle Corporation 36.75% 3.72% 12.01% 14.86% 20.55%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The data reveals several noteworthy trends in the financial performance and cost structure over the five-year period ending in 2022.

Cost of Goods Sold and Gross Profit
The cost of goods sold (COGS) as a percentage of net sales increased steadily from -63.93% in 2018, peaking at -70.01% in 2021 before sharply decreasing to -58% in 2022. Correspondingly, gross profit declined from 36.07% in 2018 to a low of 29.99% in 2021, followed by a significant rebound to 42% in 2022. This indicates improved cost efficiency or favorable pricing dynamics in the latest year.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses fluctuated mildly between -13.22% and -14.86% from 2018 through 2021 but demonstrated a large reduction to -7.16% in 2022. This reduction substantially contributed to the improvement in operating profitability observed in 2022.
Research and Development Expenses (R&D)
R&D expenses generally decreased from -2.08% in 2018 to -0.98% in 2022, indicating a gradual reduction in investment relative to sales, which could impact future innovation capacity.
Gain or Loss on Sale of Business/Properties
This line shows volatility with a notable gain of 6.23% in 2018, absence of reported amounts in 2019 and 2020, a gain of 8.89% in 2021, and a slight loss in 2022 (-0.11%). These gains contributed positively to operating results in select years.
Operating Profit
Operating profit as a percentage of net sales decreased from 27.01% in 2018 to a nadir of 16.17% in 2020, then recovered sharply to 33.74% in 2022, reflecting improved management of costs and possibly enhanced operational efficiencies.
Interest and Financing Expenses
Interest expenses remained relatively stable around -1.55% to -2.34% across the period, with a slight decline to -1.68% in 2022, suggesting consistent debt servicing costs.
Other Income (Expenses), Net
Other income/expenses fluctuated significantly, with a large negative impact in 2021 (-18.13%) likely weighing on profitability. However, 2022 saw a positive reversal to 1.18%, contributing to improved income before taxes.
Income Before Income Taxes and Equity in Net Income
This metric declined substantially from 23.55% in 2018 to 4.02% in 2021, before surging to 33.24% in 2022, illustrating considerable volatility influenced by operational performance and other income/expense factors.
Income Tax Expense
Income tax expense declined from -4.29% in 2018 to -0.88% in 2021, then increased to -5.34% in 2022, indicating a higher tax burden in the most recent year aligned with elevated pre-tax income.
Income Before Equity in Net Income of Unconsolidated Investments
Following a declining trend from 19.26% in 2018 to 3.13% in 2021, this figure rebounded strongly to 27.91% in 2022, consistent with overall income trends.
Equity in Net Income of Unconsolidated Investments, Net of Tax
Equity income increased steadily from 2.64% in 2018 to 10.55% in 2022, reflecting growing contributions from unconsolidated investments.
Net Income
Net income as a percentage of net sales declined from 21.9% in 2018 to a low of 6.01% in 2021, then surged to 38.46% in 2022. The net income attributable to Albemarle Corporation also followed this pattern, weakening considerably before a robust recovery. The reduction in noncontrolling interests in 2022 (-1.71%) partially offset the net income gain.

In summary, the company experienced a period of declining profitability from 2018 through 2021, driven primarily by rising costs of goods sold, increased other expenses, and shrinking operational earnings. The year 2022 marked a significant turnaround with substantial improvements in gross margin, lower SG&A and R&D expenses relative to sales, higher equity income contributions, and a positive shift in other income/expense items. These factors collectively led to markedly higher operating and net income margins in 2022 compared to prior years.