Earnings Miss: Sociedad Química y Minera de Chile S.A. Missed EPS By 21% And Analysts Are Revising Their Forecasts

Last week saw the newest quarterly earnings release from Sociedad Química y Minera de Chile S.A. (NYSE:SQM), an important milestone in the company's journey to build a stronger business. Results overall were not great, with earnings of US$0.75 per share falling drastically short of analyst expectations. Meanwhile revenues hit US$1.3b and were slightly better than forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Sociedad Química y Minera de Chile

Taking into account the latest results, the 17 analysts covering Sociedad Química y Minera de Chile provided consensus estimates of US$4.76b revenue in 2024, which would reflect a not inconsiderable 14% decline over the past 12 months. Per-share earnings are expected to soar 1,253% to US$1.26. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.07b and earnings per share (EPS) of US$4.55 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the US$58.31 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sociedad Química y Minera de Chile at US$85.00 per share, while the most bearish prices it at US$35.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 26% annualised decline to the end of 2024. That is a notable change from historical growth of 35% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. It's pretty clear that Sociedad Química y Minera de Chile's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sociedad Química y Minera de Chile. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Sociedad Química y Minera de Chile. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sociedad Química y Minera de Chile analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Sociedad Química y Minera de Chile (1 makes us a bit uncomfortable!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.