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Can These 4 Chemical Stocks Hit Targets This Earnings Season?
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Chemical companies are expected to have benefited from a rebound in demand across several key end markets and a moderation of de-stocking activities in the June quarter. The results of these companies are likely to be supported by the benefits of pricing and cost-saving actions.
Per the Zacks industry classification, the chemical industry falls under the broader Basic Materials sector. The second-quarter earnings picture for this sector looks bleak. Basic Materials is among the Zacks sectors that are expected to see the biggest decline in earnings in the second quarter. Overall earnings for the space are projected to fall 17.2% on 2.3% lower revenues, per the latest Earnings Trends report.
A few prominent chemical companies are lined up to report their quarterly numbers tomorrow. Let's see how things have shaped up for Air Products and Chemicals, Inc. (APD - Free Report) , Celanese Corporation (CE - Free Report) , The Chemours Company (CC - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report) ahead of their earnings releases.
The chemical industry reeled under the effects of the demand slowdown in certain major markets in 2023, which continued through first-quarter 2024. However, demand for chemicals picked up in the second quarter. Demand in the automotive space has improved, aided by an uptick in automotive production on an improved supply of semiconductors. Moreover, chemical companies are seeing a recovery in demand across the construction and electronics markets. Demand in healthcare and packaging markets also remains steady. Improved demand in major markets is expected to have aided chemical volumes in the June quarter.
On a further positive note, customer inventory de-stocking has largely ended, leading to low inventory levels. The de-stocking was primarily driven by high inflation and the lingering impacts of the pandemic that affected customer spending. Healthy end-market demand is expected to have supported sales volumes and the top line of chemical companies.
Moreover, the benefits of strategic actions, including actions to raise the selling prices of chemical products, productivity improvement measures and operational efficiency improvement, might reflect on the results of the companies in this space. A moderation in raw material and energy costs driven by the easing of supply-chain disruptions is also expected to have acted as a tailwind.
We take a look at four chemical companies that are gearing up to report their results on Aug 1.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Air Products will report results ahead of the bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -0.64% and a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $3,039.8 million, which suggests a rise of roughly 0.2% from the year-ago reported number. The consensus estimate for earnings is $3.04.
APD beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It pulled off a trailing four-quarter earnings surprise of around 0.7%, on average.
Air Products is expected to have gained from cost-improvement and productivity initiatives in the fiscal third quarter. Higher volumes in the Americas segment and pricing actions are also expected to have aided the company's performance amid headwinds from the sluggishness in Europe and China. (Read more: Air Products to Report Q3 Earnings: What's in the Cards?)
Air Products and Chemicals, Inc. Price and EPS Surprise
Celanese will report earnings numbers after the closing bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -7.95% and a Zacks Rank #4.
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. The consensus estimate for earnings is $2.80.
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. (Read more: Celanese to Report Q2 Earnings: What's in the Offing?)
Chemours will report results after the closing bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -48.09% and a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $1,537.9 million, which suggests a decline of roughly 6.4% from the year-ago reported number. The consensus estimate for earnings is 66 cents.
The company beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. CC pulled off a trailing four-quarter earnings surprise of around 4.7%, on average.
Chemours is expected to have gained from strong execution and cost-cutting measures. Its productivity and operational improvement actions across its businesses are expected to have supported its margins.
CC is likely to have witnessed continued strong adoption of the Opteon platform in the quarter to be reported. Its Titanium Technologies unit is likely to have benefited from an improvement in the titanium dioxide order book. However, volumes in the Advanced Performance Materials segment are expected to have been impacted by the weakness in the advanced materials portfolio, serving economically sensitive end markets.
Axalta Coating Systems will come up with its quarterly results before the opening bell. Our proven model predicts an earnings beat for AXTA this time around. This is because it has an Earnings ESP of +0.01% and a Zacks Rank #3.
The Zacks Consensus Estimate for AXTA’s revenues is pegged at $1,342 million, which suggests a year-over-year rise of roughly 3.7%. The consensus estimate for earnings is 51 cents.
The company beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters while missing once and delivering in-line results on the other occasion. It has a trailing four-quarter earnings surprise of around 7%, on average.
AXTA is expected to have benefited from the strength in Refinish and Light Vehicle businesses, offsetting the weakness in industrial markets. Continued strong volume growth in China is expected to have aided the performance of its Mobility Coatings segment. The results in the Performance Coatings unit are likely to have been supported by favorable pricing and mix and the contributions from the Andre Koch acquisition.
Axalta Coating Systems Ltd. Price and EPS Surprise
Image: Bigstock
Can These 4 Chemical Stocks Hit Targets This Earnings Season?
Chemical companies are expected to have benefited from a rebound in demand across several key end markets and a moderation of de-stocking activities in the June quarter. The results of these companies are likely to be supported by the benefits of pricing and cost-saving actions.
Per the Zacks industry classification, the chemical industry falls under the broader Basic Materials sector. The second-quarter earnings picture for this sector looks bleak. Basic Materials is among the Zacks sectors that are expected to see the biggest decline in earnings in the second quarter. Overall earnings for the space are projected to fall 17.2% on 2.3% lower revenues, per the latest Earnings Trends report.
A few prominent chemical companies are lined up to report their quarterly numbers tomorrow. Let's see how things have shaped up for Air Products and Chemicals, Inc. (APD - Free Report) , Celanese Corporation (CE - Free Report) , The Chemours Company (CC - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report) ahead of their earnings releases.
The chemical industry reeled under the effects of the demand slowdown in certain major markets in 2023, which continued through first-quarter 2024. However, demand for chemicals picked up in the second quarter. Demand in the automotive space has improved, aided by an uptick in automotive production on an improved supply of semiconductors. Moreover, chemical companies are seeing a recovery in demand across the construction and electronics markets. Demand in healthcare and packaging markets also remains steady. Improved demand in major markets is expected to have aided chemical volumes in the June quarter.
On a further positive note, customer inventory de-stocking has largely ended, leading to low inventory levels. The de-stocking was primarily driven by high inflation and the lingering impacts of the pandemic that affected customer spending. Healthy end-market demand is expected to have supported sales volumes and the top line of chemical companies.
Moreover, the benefits of strategic actions, including actions to raise the selling prices of chemical products, productivity improvement measures and operational efficiency improvement, might reflect on the results of the companies in this space. A moderation in raw material and energy costs driven by the easing of supply-chain disruptions is also expected to have acted as a tailwind.
We take a look at four chemical companies that are gearing up to report their results on Aug 1.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Air Products will report results ahead of the bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -0.64% and a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $3,039.8 million, which suggests a rise of roughly 0.2% from the year-ago reported number. The consensus estimate for earnings is $3.04.
APD beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It pulled off a trailing four-quarter earnings surprise of around 0.7%, on average.
Air Products is expected to have gained from cost-improvement and productivity initiatives in the fiscal third quarter. Higher volumes in the Americas segment and pricing actions are also expected to have aided the company's performance amid headwinds from the sluggishness in Europe and China. (Read more: Air Products to Report Q3 Earnings: What's in the Cards?)
Air Products and Chemicals, Inc. Price and EPS Surprise
Air Products and Chemicals, Inc. price-eps-surprise | Air Products and Chemicals, Inc. Quote
Celanese will report earnings numbers after the closing bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -7.95% and a Zacks Rank #4.
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. The consensus estimate for earnings is $2.80.
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. (Read more: Celanese to Report Q2 Earnings: What's in the Offing?)
Celanese Corporation Price and EPS Surprise
Celanese Corporation price-eps-surprise | Celanese Corporation Quote
Chemours will report results after the closing bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -48.09% and a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $1,537.9 million, which suggests a decline of roughly 6.4% from the year-ago reported number. The consensus estimate for earnings is 66 cents.
The company beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. CC pulled off a trailing four-quarter earnings surprise of around 4.7%, on average.
Chemours is expected to have gained from strong execution and cost-cutting measures. Its productivity and operational improvement actions across its businesses are expected to have supported its margins.
CC is likely to have witnessed continued strong adoption of the Opteon platform in the quarter to be reported. Its Titanium Technologies unit is likely to have benefited from an improvement in the titanium dioxide order book. However, volumes in the Advanced Performance Materials segment are expected to have been impacted by the weakness in the advanced materials portfolio, serving economically sensitive end markets.
The Chemours Company Price and EPS Surprise
The Chemours Company price-eps-surprise | The Chemours Company Quote
Axalta Coating Systems will come up with its quarterly results before the opening bell. Our proven model predicts an earnings beat for AXTA this time around. This is because it has an Earnings ESP of +0.01% and a Zacks Rank #3.
The Zacks Consensus Estimate for AXTA’s revenues is pegged at $1,342 million, which suggests a year-over-year rise of roughly 3.7%. The consensus estimate for earnings is 51 cents.
The company beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters while missing once and delivering in-line results on the other occasion. It has a trailing four-quarter earnings surprise of around 7%, on average.
AXTA is expected to have benefited from the strength in Refinish and Light Vehicle businesses, offsetting the weakness in industrial markets. Continued strong volume growth in China is expected to have aided the performance of its Mobility Coatings segment. The results in the Performance Coatings unit are likely to have been supported by favorable pricing and mix and the contributions from the Andre Koch acquisition.
Axalta Coating Systems Ltd. Price and EPS Surprise
Axalta Coating Systems Ltd. price-eps-surprise | Axalta Coating Systems Ltd. Quote
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