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Celanese (CE) to Report Q3 Earnings: What's in the Cards?

By Zacks Investment ResearchStock MarketsOct 19, 2021 12:26AM ET
www.investing.com/analysis/celanese-ce-to-report-q3-earnings-whats-in-the-cards-200605555
Celanese (CE) to Report Q3 Earnings: What's in the Cards?
By Zacks Investment Research   |  Oct 19, 2021 12:26AM ET
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Celanese (NYSE:CE) Corporation CE is set to release third-quarter 2021 results, after market close on Oct 21. Benefits from productivity actions, investments in high-return organic projects and strategic acquisitions are likely to get reflected in third-quarter performance. However, the company is likely to have faced headwinds stemming from higher input costs.

The leading chemical and specialty materials maker beat the Zacks Consensus Estimate for earnings in all of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 15.9%, on average. The company posted an earnings surprise of around 11.8% in the last reported quarter.

Celanese’s shares have gained 39.7% in the past year compared with a 17.6% rise of the industry.

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Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for Celanese’s revenues in the to-be-reported quarter is pegged at $2,172 million, which suggests year-over-year increase of 53.9%.

The consensus mark for third-quarter net sales in the Engineered Materials unit is currently pegged at $702 million, which calls for a 33.5% year-over-year increase.

The Zacks Consensus Estimate for the Acetate Tow division is pegged at $139 million, which indicates a 7.8% year-over-year increase.

Factors at Play in Q3

Celanese is likely to have gained from its productivity actions, investments in high-return organic projects and strategic acquisitions in the quarter to be reported.

The company is also committed toward executing its productivity programs that include the implementation of a number of cost-reduction capital projects.

The company’s strategic actions that include operational improvement as well as cost savings through productivity initiatives and price-increase actions are likely to have contributed to the bottom line in the to-be-reported quarter. Benefits of acquisitions are also expected to get reflected in the company’s third-quarter performance. Celanese is also expected to have gained from improving demand in most of its end markets.

However, the company is expected to have faced headwinds from elevated raw material costs due to supply constraints. It is likely to have faced sustained inflation across many key raw materials as well as supply chain costs in the third quarter. Tight availability of resins, including nylon and glass fiber is expected to have led to a rise in raw material costs in the third quarter. Higher input costs are likely to have hurt margins in the to-be-reported quarter.

The Acetyl Chain segment is anticipated to have encountered challenges from a moderation in the industry pricing. The company might have faced persistent moderation in acetic acid and VAM pricing in China in the third quarter.

The ongoing semiconductor shortage is also affecting automotive production globally. Automotive order patterns of the company are likely to have been affected.

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 -1.93%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $4.71. 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

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:

Olin (NYSE:OLN) Corporation OLN, scheduled to release earnings on Oct 21, has an Earnings ESP of +7.45% and sports a Zacks Rank #1.

Cleveland-Cliffs (NYSE:CLF) Inc. CLF, scheduled to release earnings on Oct 22, has an Earnings ESP of +0.45% and carries a Zacks Rank #1.

Albemarle (NYSE:ALB) Corporation ALB, scheduled to release earnings on Nov 3, has an Earnings ESP of +8.05% and carries a Zacks Rank #3.


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Celanese (CE) to Report Q3 Earnings: What's in the Cards?
 

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Celanese (CE) to Report Q3 Earnings: What's in the Cards?

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