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The company surpassed Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice, with the average being 2.1%.
Celanese's investment in high-return organic projects, cost-cutting initiatives and acquisition synergies are likely to have contributed to its second-quarter performance. However, it is expected to have faced headwinds from sluggish demand in certain end markets as well as pricing pressure.
The stock has gained 10.9% in the past year against the industry’s fall of 13.1%.
Image Source: Zacks Investment Research
What Do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,725.7 million, which implies a decline of 2.5% from the year-ago reported number.
Our estimate for Celanese’s Engineered Materials division’s revenues is pegged at $1,648.4 million, suggesting a rise of 4% year over year. The same for the Acetyl Chain unit’s revenues is $1,125.1 million, indicating a fall of 8.8%.
Some Factors to Watch
Celanese's strategic acquisitions, productivity initiatives and investments in organic projects are expected to have aided its earnings in the second quarter.
Celanese's strategic acquisitions are expected to generate opportunities for future growth, investment and synergy. Its acquisition of the majority of DuPont's Mobility & Materials ("M&M") division has enabled it to expand its presence in high-value applications. CE anticipates incremental M&M synergies of at least $150 million in 2024.
Celanese is also focused on implementing its productivity programs, which include the implementation of many cost-cutting capital projects. Productivity initiatives are likely to have supported its profits in the June quarter.
The company is taking steps to implement strategic initiatives, factoring in the volatility and unpredictability of the current market landscape and competitive climate. These initiatives include improving its commercial teams, adjusting production and inventory levels to meet current demand, implementing cost-cutting measures and optimizing cash flow. These activities are expected to generate significant cash and sustain earnings growth.
Celanese has completed the start-up of a new 1.3-million-ton Clear Lake acetic acid expansion unit and a vinyl acetate ethylene unit in Nanjing. The Clear Lake expansion is expected to have contributed to strong earnings performance in the second quarter.
However, CE is facing headwinds due to weaker demand in some of its end markets. Demand remains sluggish in industrial and consumer goods end markets. Demand in Europe is also expected to have remained subdued in the second quarter. The company's volumes are likely to have been hampered by a slower worldwide demand recovery.
Celanese is also being challenged by significant competition. Its prices are being pushed down due to competition. CE saw lower year-over-year pricing across all of its segments in the first quarter and might have faced pricing pressure owing to the challenging competitive dynamics in the second quarter as well.
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 -7.95%. This is because the Most Accurate Estimate is pegged at $2.58 while the Zacks Consensus Estimate stands at $2.80. 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 #4 (Sell).
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for RGLD’s second-quarter earnings per share is currently pegged at $1.17.
Agnico Eagle Mines Limited (AEM - Free Report) , slated to release earnings on Jul 31, has an Earnings ESP of +4.86% and carries a Zacks Rank #2 at present.
The consensus mark for AEM’s second-quarter earnings is currently pegged at 89 cents.
Barrick Gold Corporation (GOLD - Free Report) , slated to release earnings on Aug 12, has an Earnings ESP of +3.29% and carries a Zacks Rank #2 at present.
The consensus mark for GOLD’s second-quarter earnings is currently pegged at 26 cents.
Image: Bigstock
Celanese (CE) to Report Q2 Earnings: What's in the Offing?
Celanese Corporation (CE - Free Report) is scheduled to release second-quarter 2024 results after the closing bell on Aug 1.
The company surpassed Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice, with the average being 2.1%.
Celanese's investment in high-return organic projects, cost-cutting initiatives and acquisition synergies are likely to have contributed to its second-quarter performance. However, it is expected to have faced headwinds from sluggish demand in certain end markets as well as pricing pressure.
The stock has gained 10.9% in the past year against the industry’s fall of 13.1%.
Image Source: Zacks Investment Research
What Do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,725.7 million, which implies a decline of 2.5% from the year-ago reported number.
Our estimate for Celanese’s Engineered Materials division’s revenues is pegged at $1,648.4 million, suggesting a rise of 4% year over year. The same for the Acetyl Chain unit’s revenues is $1,125.1 million, indicating a fall of 8.8%.
Some Factors to Watch
Celanese's strategic acquisitions, productivity initiatives and investments in organic projects are expected to have aided its earnings in the second quarter.
Celanese's strategic acquisitions are expected to generate opportunities for future growth, investment and synergy. Its acquisition of the majority of DuPont's Mobility & Materials ("M&M") division has enabled it to expand its presence in high-value applications. CE anticipates incremental M&M synergies of at least $150 million in 2024.
Celanese is also focused on implementing its productivity programs, which include the implementation of many cost-cutting capital projects. Productivity initiatives are likely to have supported its profits in the June quarter.
The company is taking steps to implement strategic initiatives, factoring in the volatility and unpredictability of the current market landscape and competitive climate. These initiatives include improving its commercial teams, adjusting production and inventory levels to meet current demand, implementing cost-cutting measures and optimizing cash flow. These activities are expected to generate significant cash and sustain earnings growth.
Celanese has completed the start-up of a new 1.3-million-ton Clear Lake acetic acid expansion unit and a vinyl acetate ethylene unit in Nanjing. The Clear Lake expansion is expected to have contributed to strong earnings performance in the second quarter.
However, CE is facing headwinds due to weaker demand in some of its end markets. Demand remains sluggish in industrial and consumer goods end markets. Demand in Europe is also expected to have remained subdued in the second quarter. The company's volumes are likely to have been hampered by a slower worldwide demand recovery.
Celanese is also being challenged by significant competition. Its prices are being pushed down due to competition. CE saw lower year-over-year pricing across all of its segments in the first quarter and might have faced pricing pressure owing to the challenging competitive dynamics in the second quarter as well.
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 -7.95%. This is because the Most Accurate Estimate is pegged at $2.58 while the Zacks Consensus Estimate stands at $2.80. 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 #4 (Sell).
Celanese Corporation Price and EPS Surprise
Celanese Corporation price-eps-surprise | Celanese Corporation Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Royal Gold Inc. (RGLD - Free Report) , slated to release its earnings on Aug 7, has an Earnings ESP of +2.99% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for RGLD’s second-quarter earnings per share is currently pegged at $1.17.
Agnico Eagle Mines Limited (AEM - Free Report) , slated to release earnings on Jul 31, has an Earnings ESP of +4.86% and carries a Zacks Rank #2 at present.
The consensus mark for AEM’s second-quarter earnings is currently pegged at 89 cents.
Barrick Gold Corporation (GOLD - Free Report) , slated to release earnings on Aug 12, has an Earnings ESP of +3.29% and carries a Zacks Rank #2 at present.
The consensus mark for GOLD’s second-quarter earnings is currently pegged at 26 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.