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The company beat Zacks Consensus Estimate for earnings in two of the last four quarters while missing it twice. It has a trailing four-quarter earnings surprise of around 3.8% on average. It posted an earnings surprise of 13.6% in the last reported quarter.
In the fourth quarter, the company is expected to have benefited from its cost and pricing actions and the positive impact of its acquisitions. However, it might have encountered challenges due to weak demand and consumer de-stocking.
Celanese’s shares have gained 27.9% in a year compared with its industry’s 21% rise.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for this announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter sales is currently pegged at $2,610.6 million, which suggests a rise of 11.2% from the year-ago reported number.
Our estimate for CE's Engineered Materials segment net sales stands at $1,587.5 million for the fourth quarter, indicating a year-over-year increase of 28.3%. The same for the Acetyl Chain segment is pegged at $987.1 million, suggesting a decline of 13% year over year.
Some Factors at Play
Celanese is expected to have benefited from its cost and productivity initiatives, strategic investments in high-return organic projects and the synergies derived from acquisitions in the fourth quarter.
The company continues to actively pursue acquisitions, which are providing opportunities for additional growth, investment and synergies. The benefits of acquisitions are expected to reflect on its fourth-quarter performance. The M&M acquisition is expected to have contributed to the company’s operating EBITDA. CE’s price increase actions are also likely to have supported margins in the quarter.
Moreover, Celanese is proactively implementing strategic initiatives recognizing the volatility and unpredictability of the current market landscape and competitive environment. These actions involve strengthening its commercial teams, aligning production and inventory levels with prevailing demand, implementing cost-saving measures, and optimizing cash flow. The benefits of these actions are expected to reflect on the company’s fourth-quarter results.
However, the company is likely to have faced headwinds from demand softness and customer de-stocking in certain end markets in the quarter to be reported. It witnessed weak demand in several end markets and continued customer de-stocking in the third quarter of 2023.
Soft demand has led to inventory reduction and deferral of orders by the company’s customers. Demand remains weak in industrial and electrical & electronics end markets. Weaker demand recovery globally and de-stocking are likely to continue to have weighed on the company’s volumes in the December quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Celanese this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Celanese is -0.14%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $2.29. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Celanese currently carries a Zacks Rank #2.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for NTR’s earnings for the fourth quarter is currently pegged at 72 cents.
Eldorado Gold Corporation (EGO - Free Report) , slated to release earnings on Feb 22, has an Earnings ESP of +3.53% and carries a Zacks Rank #2 at present.
The consensus mark for EGO’s fourth-quarter earnings is currently pegged at 21 cents.
Franco-Nevada Corporation (FNV - Free Report) , scheduled to release fourth-quarter earnings on Mar 5, has an Earnings ESP of +0.63%.
The Zacks Consensus Estimate for FNV's earnings for the fourth quarter is currently pegged at 80 cents. FNV currently carries a Zacks Rank #3.
Image: Bigstock
Celanese (CE) to Report Q4 Earnings: What's in the Cards?
Celanese Corporation (CE - Free Report) is set to release fourth-quarter 2023 results after the closing bell on Feb 20.
The company beat Zacks Consensus Estimate for earnings in two of the last four quarters while missing it twice. It has a trailing four-quarter earnings surprise of around 3.8% on average. It posted an earnings surprise of 13.6% in the last reported quarter.
In the fourth quarter, the company is expected to have benefited from its cost and pricing actions and the positive impact of its acquisitions. However, it might have encountered challenges due to weak demand and consumer de-stocking.
Celanese’s shares have gained 27.9% in a year compared with its industry’s 21% rise.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for this announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter sales is currently pegged at $2,610.6 million, which suggests a rise of 11.2% from the year-ago reported number.
Our estimate for CE's Engineered Materials segment net sales stands at $1,587.5 million for the fourth quarter, indicating a year-over-year increase of 28.3%. The same for the Acetyl Chain segment is pegged at $987.1 million, suggesting a decline of 13% year over year.
Some Factors at Play
Celanese is expected to have benefited from its cost and productivity initiatives, strategic investments in high-return organic projects and the synergies derived from acquisitions in the fourth quarter.
The company continues to actively pursue acquisitions, which are providing opportunities for additional growth, investment and synergies. The benefits of acquisitions are expected to reflect on its fourth-quarter performance. The M&M acquisition is expected to have contributed to the company’s operating EBITDA. CE’s price increase actions are also likely to have supported margins in the quarter.
Moreover, Celanese is proactively implementing strategic initiatives recognizing the volatility and unpredictability of the current market landscape and competitive environment. These actions involve strengthening its commercial teams, aligning production and inventory levels with prevailing demand, implementing cost-saving measures, and optimizing cash flow. The benefits of these actions are expected to reflect on the company’s fourth-quarter results.
However, the company is likely to have faced headwinds from demand softness and customer de-stocking in certain end markets in the quarter to be reported. It witnessed weak demand in several end markets and continued customer de-stocking in the third quarter of 2023.
Soft demand has led to inventory reduction and deferral of orders by the company’s customers. Demand remains weak in industrial and electrical & electronics end markets. Weaker demand recovery globally and de-stocking are likely to continue to have weighed on the company’s volumes in the December quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Celanese this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Celanese is -0.14%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $2.29. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Celanese currently carries a Zacks Rank #2.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Nutrien Ltd. (NTR - Free Report) , scheduled to release earnings on Feb 21, has an Earnings ESP of +39.72% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for NTR’s earnings for the fourth quarter is currently pegged at 72 cents.
Eldorado Gold Corporation (EGO - Free Report) , slated to release earnings on Feb 22, has an Earnings ESP of +3.53% and carries a Zacks Rank #2 at present.
The consensus mark for EGO’s fourth-quarter earnings is currently pegged at 21 cents.
Franco-Nevada Corporation (FNV - Free Report) , scheduled to release fourth-quarter earnings on Mar 5, has an Earnings ESP of +0.63%.
The Zacks Consensus Estimate for FNV's earnings for the fourth quarter is currently pegged at 80 cents. FNV currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.