Chemical Stock Earnings Slated On Nov 1: DWDP, CC, PAH & ICL

A few chemical companies are scheduled to report their quarterly numbers on Nov 1.

The chemical industry is gaining from sustained demand strength across major end-use markets such as construction and automotive. Improving fundamentals in the energy space — another key market for chemicals — have also acted as significant tailwinds to the industry. The recovery is being driven by a rebound in crude oil prices from their historic lows.

However, companies in the chemical space face headwinds from a spike in costs of raw materials as a result of short supply partly due to production outages and plant shutdowns. Trade tensions between the United States and China also pose as headwinds to the chemical industry.

However, strategic measures including productivity improvement, pricing hike actions and portfolio restructuring are likely to drive the performance of chemical makers in Q3. Cost-cutting measures by these companies are likely to improve industry-wide margin. Synergies from acquisitions will also boost earnings. Moreover, President Donald Trump’s business-friendly tax reform is a positive for U.S. chemical stocks.

Per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. It is among the Zacks sectors that are expected to rack up the strongest gains in Q3. Earnings for the sector are projected to surge 33.8% in Q3, while revenues are expected to go up 15.5%, per the latest Earnings Trends.

We take a look at four chemical companies that are gearing up to report their results tomorrow.

DowDuPont Inc. (NYSE:DWDP) will report earnings numbers ahead of the bell. It has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 71 cents. The stock carries a favorable Zacks Rank #3 (Hold), but its ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company delivered a positive earnings surprise of 3% in the last reported quarter.

The Zacks Consensus Estimate for revenues for Q3 stands at $20,305 million, reflecting an estimated 16.3% decline on a sequential comparison basis.

DowDuPont will likely gain from higher pricing, new product launches and solid demand across most of its end-markets in Q3. It should also benefit from cost synergy realizations in the to-be-reported quarter. (Read more: DowDuPont Warms Up to Q3 Earnings: What's in Store?)

The Chemours Company (NYSE:CC) will report results after the bell. It has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.38. It has a Zacks Rank #5 (Strong Sell), which we caution against going into the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chemours has outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 15.6%.

Revenues for Chemours for Q3 are projected to rise roughly 8.3% year over year as the Zacks Consensus Estimate for the quarter is currently pegged at $1,716 million.

Chemours is expected to gain from favorable pricing and demand in the Fluoroproducts segment in the to-be-reported quarter. Sustained adoption of the Opteon refrigerant platform and higher prices are likely to drive results in this segment. Moreover, increased adoption of Ti-Pure TiO2 products should support results in the company’s Titanium Technologies division.

However, the company is exposed to headwinds from higher raw material and distribution costs, which coupled with costs related to planned maintenance, may put some pressure on its margins. (Read more: What's in the Offing for Chemours in Q3 Earnings?)

Platform Specialty Products Corporation (NYSE:PAH) will report results ahead of the bell. The company has an Earnings ESP of -4.55%. The Zacks Consensus Estimate is pegged at 4 cents. It has a Zacks Rank #4 (Sell), which we caution against going into the earnings announcement.

The company posted better-than-expected results in two of the last four quarters, missed once and delivered in-line results on the other occasion. The average earnings surprise was a positive 3.3%.

The Zacks Consensus Estimate for revenues for the to-be-reported quarter stands at $502 million, reflecting a decline of 44.5% from the year-ago quarter.

While the company faces challenges from raw material price inflation and some currency headwind, it is likely to gain from pricing initiatives, focus on margin improvements and favorable demand conditions across the end markets in the to-be-reported quarter.

Israel Chemicals Ltd. (NYSE:ICL) will report results before of the opening bell. It has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 9 cents. The stock carries a Zacks Rank #3, but its ESP makes surprise prediction difficult.

The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of around 19.2%.

The company is likely to gain from higher prices, favorable market conditions, cost management actions and implementation of a value-oriented sales approach across its bromine and phosphate value chains.

3 Medical Stocks to Buy Now

The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.

So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.

See them today for free >>