Chemical Stocks Aug 9 Earnings Preview: UNVR, DQ, AGFS, BIOA

A few chemical companies are lined up to report their quarterly results on Aug 9. The chemical industry remains on a slow road to recovery amid a still challenging operating environment. Chemical makers are gaining from strategic measures including expansion into high-growth markets, aggressive cost management and productivity actions as well as acquisitions.

However, the industry faces certain roadblocks including a still weak agriculture market, weak demand in the energy space, Eurozone’s tepid recovery and slowdown in China.

As per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. Basic Materials is among the sectors that are expected to see double-digit year-over-year earnings decline in the second-quarter, as per the latest Earnings Preview report.

Based on the earnings scorecard as of Aug 5, 95% of the sector participants on the S&P 500 index have unveiled their quarterly numbers. Earnings for these companies are down 11.8% from the same period last year on 9.1% lower revenues. The sector’s earnings are expected to drop 11.7% in the quarter, considering the companies that are yet to report. Revenues for the sector are likely to fall 7.6%.

Let’s take a peek at four chemical companies that are scheduled to report their second-quarter results on Aug 9.

Univar Inc. (NYSE:UNVR) , which will report before the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 18 cents. The company carries a Zacks Rank #4 (Sell), which we caution against ahead of the earnings release. The company posted an average negative earnings surprise of 62.39% in the last four quarters.

Univar faces headwinds in the upstream oil and gas markets. Industrial demand is also anticipated to remain sluggish in the second quarter. The company is executing several cost saving programs, in an attempt to drive productivity and operational excellence and grow organically. (Read more: What's in the Cards for Univar this Earnings Season?)

Daqo New Energy Corp. (NYSE:DQ) will report ahead of the bell. It has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.26. The stock carries a Zacks Rank #3 (Hold), but its 0.00% ESP makes surprise prediction difficult. The company beat estimates in the trailing four quarters with an average positive surprise of 237.29%.

AgroFresh Solutions, Inc. (NASDAQ:AGFS) , which will report before the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 18 cents. The stock holds a Zacks Rank #3, but its 0.00% ESP makes surprise prediction difficult. The company posted an average positive earnings surprise of 20.84% in the last four quarters.

BioAmber Inc. (NYSE:BIOA) will report after the bell. It has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 24 cents. The stock carries a Zacks Rank #3, but its 0.00% ESP makes surprise prediction difficult. BioAmber posted an average negative earnings surprise of 173.81% in the last four quarters.