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Celanese (CE) to Report Q4 Earnings: What's in the Offing?

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Celanese Corporation (CE - Free Report) is set to release fourth-quarter 2021 results, after market close on Jan 27. Benefits from productivity actions, investments in high-return organic projects and strategic acquisitions are likely to get reflected in fourth-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 12.7%, on average. The company posted an earnings surprise of around 2.3% in the last reported quarter.

Celanese’s shares have gained 25.2% in the past year against a 7.3% fall of the industry.

Zacks Investment ResearchImage 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 +2.98%. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at $5.05. 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 #3.

What do the Estimates Say?

The Zacks Consensus Estimate for Celanese’s revenues in the to-be-reported quarter is pegged at $2,251 million, which suggests a year-over-year increase of 41.5%.

The consensus mark for fourth-quarter net sales in the Engineered Materials unit is currently pegged at $707 million, which calls for a 23.6% year-over-year increase. The same for the Acetyl Chain segment is at $1,628 million, suggesting a 78.9% year-over-year rise.

The Zacks Consensus Estimate for the Acetate Tow division is pegged at $137 million, which indicates a 2.2% year-over-year increase.

Factors at Play in Q4

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 to executing its productivity programs that include implementing several 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. The benefits of acquisitions are also expected to get reflected in the company’s fourth-quarter performance. Celanese is also expected to have gained from higher demand in most of its end markets. It is expected to have witnessed pent-up demand in the fourth quarter.

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 fourth 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 pricing in China in the fourth quarter.

The ongoing semiconductor shortage is also affecting automotive production globally. Weaker automotive production is likely to have affected the company’s automotive order patterns and volumes in the fourth quarter.

Stocks That Warrant a Look

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

Olin Corporation (OLN - Free Report) , scheduled to release earnings on Jan 27, has an Earnings ESP of +1.95% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Olin's fourth-quarter earnings has been revised 4.1% upward in the past 60 days. The consensus estimate for OLN’s earnings for the quarter is currently pegged at $2.53.

CF Industries Holdings, Inc. (CF - Free Report) , expected to release earnings on Feb 16, has an Earnings ESP of +9.44% and carries a Zacks Rank #2.

The consensus estimate for CF Industries' fourth-quarter earnings has been revised 31.5% upward in the past 60 days. The Zacks Consensus Estimate for CF’s earnings for the quarter stands at $3.25.

Methanex Corporation (MEOH - Free Report) , scheduled to release earnings on Jan 26, has an Earnings ESP of +0.52% and carries a Zacks Rank #3.

The Zacks Consensus Estimate for Methanex's fourth-quarter earnings has been revised 4.2% upward in the past 60 days. The consensus estimate for MEOH’s earnings for the quarter is currently pegged at $2.56.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.