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Celanese (CE) to Report Q2 Earnings: What's in the Cards?

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Celanese Corporation (CE - Free Report) is set to release second-quarter 2021 results, after market close on Jul 22. Benefits from productivity actions, investments in high-return organic projects and strategic acquisitions are likely to get reflected in second-quarter performance. However, it 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 quarter. It has a trailing four-quarter earnings surprise of roughly 17.8%, on average. The company posted an earnings surprise of around 15% in the last reported quarter.

Celanese’s shares have gained 57.7% in the past year against 19.2% fall of the industry.

Zacks Investment Research
Image Source: Zacks Investment Research

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

Zacks Model

Our proven model predicts 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.

Earnings ESP: Earnings ESP for Celanese is +2.30%. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at $4.28. 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.

What do the Estimates Say?

The Zacks Consensus Estimate for Celanese’s revenues in the to-be-reported quarter is pegged at $1,904 million, which suggests year-over-year increase of 59.6%.

The consensus mark for net sales in the Engineered Materials unit is currently pegged at $628 million for the second quarter, which calls for a 49.5% year-over-year increase.

The Zacks Consensus Estimate for the Acetate Tow division is pegged at $126 million, calling for no change year over year.

Factors at Play in Q2

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 second-quarter performance.

Higher demand in automotive, industrial and electronics applications is likely to have contributed to the company’s second-quarter results.

The company is expected to have faced headwinds from elevated raw material costs due to tight availability of resins, including nylon. It is likely to have faced sustained inflation across many key raw materials as well as energy and supply chain costs associated with winter storm Uri in the second quarter. Higher input costs are likely to have hurt margins in the to-be-reported quarter.

Cost headwind related to the storm is also expected to have persisted in the Acetyl Chain segment in the second quarter. Weaker automotive production is likely to have affected the company’s automotive order patterns.

Subdued demand is also hurting volumes of acetate tow. As such, sales in the Acetate Tow unit are likely to have remained under pressure in the second quarter.

Celanese Corporation Price and EPS Surprise

 

Celanese Corporation Price and EPS Surprise

Celanese Corporation price-eps-surprise | Celanese Corporation Quote

 

Stocks That Warrant a Look

Here are other companies in the basic materials space you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:

Cabot Corporation (CBT - Free Report) , scheduled to release earnings on Aug 9, has an Earnings ESP of +14.81% and sports a Zacks Rank #1.

Nutrien Ltd. (NTR - Free Report) , scheduled to release earnings on Aug 9, has an Earnings ESP of +0.57% and carries a Zacks Rank #1.

Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Jul 28, has an Earnings ESP of +4.29% and carries a Zacks Rank #3.