LyondellBasell Industries (LYB -7.79%), a global leader in chemical manufacturing and plastics, released its second-quarter 2025 earnings on August 1, 2025. The headline news: GAAP sales were $7.66 billion, Revenue (GAAP) was ahead of Wall Street estimates, but non-GAAP earnings fell short of expectations. Non-GAAP earnings per share came in at $0.62, under the $0.80 analyst consensus estimate (non-GAAP), while reported net income (GAAP) was $115 million. Leadership described the period as marked by ongoing margin pressures, significant one-time charges, and active progress on portfolio reshaping and cost improvement initiatives.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.62 | $0.80 | $2.20 | (71.8 %) |
| EPS (GAAP) | $0.34 | $2.82 | (−88.0 %) | |
| Revenue (GAAP) | $7.66 billion | N/A | $8.68 billion | (11.8 %) |
| EBITDA (Non-GAAP) | $715 million | $1.33 billion | (46.2 %) | |
| Cash from Operating Activities | $351 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
LyondellBasell Industries is a major producer of chemicals, plastics, and polymers used in applications ranging from everyday packaging to automotive parts and construction materials. Its operations span the globe, with major manufacturing hubs in North America and Europe. The company’s core activities include the production of olefins and polyolefins, which are essential building blocks for plastic products, as well as advanced polymer solutions and intermediates used in manufacturing.
LyondellBasell has focused its strategy on advancing its Circular & Low Carbon Solutions product line, reshaping its business portfolio, driving operational efficiency and cost management, and completing its exit from the refining business. These priorities address both market changes and increasing regulatory demands for sustainability. Management points to cost containment, innovation in recycling and sustainability, and disciplined investment as critical to its future performance.
Earnings Update: Detailed Insights From the Quarter
Revenue (GAAP) topped the consensus analyst estimate. The operating result benefited from the successful completion of maintenance at the Channelview complex in North America, which increased production of polyethylene -- a key material used in packaging and consumer goods.
Non-GAAP earnings lagged expectations. Non-GAAP diluted earnings per share fell to $0.62, missing analyst forecasts (non-GAAP). This miss reflected one-time charges totaling $87 million. These charges included $32 million in asset write-downs related to planned sales of European facilities and $20 million in costs tied to the ongoing cash improvement program. The company’s reported EBITDA, a commonly used profitability metric that stands for earnings before interest, taxes, depreciation, and amortization, also declined sharply compared with the prior-year period, with reported EBITDA of $606 million compared to $1,643 million for Q2 2024.
The company pressed forward with its strategic portfolio update. It announced plans to sell four European assets to focus on lower-cost, core regions. LyondellBasell also deferred its Flex-2 capital project, preserving cash while market conditions remain weak. Management executed its planned exit from the refining segment, now classifying it as a discontinued operation, aiming to cut carbon emissions exposure.
Progress was noted in its Circular & Low Carbon Solutions product line, which aims to produce more sustainable polymers by relying on recycled or renewable materials. While still a small part of total revenue, these initiatives are receiving continued investment, with chemical recycling projects such as the MoReTec-1 plant, which began construction in 2024 and is targeted to start up in 2026. This focus aligns with upcoming European regulations, which are expected to drive more demand for recycled-content plastics.
The period saw disciplined capital allocation. LyondellBasell paid out $445 million in dividends and spent $91 million on share repurchases for a combined return of $536 million to shareholders. At quarter end, the company reported cash and equivalents of $1.7 billion and total available liquidity of $6.4 billion.
In segment results, the North America Olefins and Polyolefins business benefited from strong domestic packaging, construction, and healthcare demand, aided by lower U.S. natural gas prices. Europe showed modest margin recovery from reduced raw material costs and some volume improvement, but remained a drag on profitability overall. Intermediate chemical products, which include raw materials for coatings and fuels, had improved margins due to feedstock reductions but continued to see weakness in oxyfuels used for gasoline blending.
No significant gains were booked from asset sales this quarter, in contrast to the prior year (2024), which registered a sizeable gain from the sale of the U.S. Gulf Coast Ethylene Oxide and Derivatives business. The company did record $47 million in GAAP losses from discontinued operations related to completing the refining exit, a non-recurring charge.
The company pays a regular quarterly dividend and has now returned value to shareholders for 14 consecutive years. There was no dividend increase or decrease announced for the period.
Looking Ahead: Management Outlook and Key Areas to Watch
Management offered selected operational guidance for Q3 2025, expecting some improvement in polyethylene margins in North America due to stronger pricing and better utilization rates following maintenance work. Operating rates are targeted at 85% for North America olefins and polyolefins, 75% operating rate for European olefins and polyolefins (O&P) assets, and 80% for Intermediates & Derivatives (I&D) assets. Seasonal demand and lower raw material costs should provide support in Europe, but management noted that progress is slow and the recovery path remains uncertain.
No formal forward guidance was provided for revenue or profit. The outlook remains cautious, especially given uncertainty around global trade policies, ongoing overcapacity in Asia, and persistent margin pressure in Europe. Investors should watch for updates on the planned European asset sales, the pace of project spending, regulations affecting recycled plastics, and any moves around dividend policy or additional shareholder payouts.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
