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Chemical Stock Q4 Earnings Slated on Feb 8: DD, FMC & AVNT

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A few chemical companies are lined up to report their quarterly numbers tomorrow. A rebound in end-market demand from the coronavirus-led downturn is likely to have aided the performance of chemical companies in the fourth quarter.

Chemical makers are witnessing a strong rebound in demand in the key end-use markets, including automotive, building & construction and electronics, from the pandemic-led lows. These companies are seeing higher demand from the automotive market, despite the chip shortage, which continues to affect automotive builds globally. Demand in construction, packaging and healthcare also remains strong. The companies in this space are also seeing a recovery in demand across the aerospace and energy markets. Higher industrial demand is expected to have boosted sales volumes and the top line of chemical companies in the fourth quarter.

However, the impacts of raw material cost inflation, and higher supply chain and logistics costs are expected to reflect on chemical companies’ fourth-quarter results. Supply chain disruptions due to the pandemic and weather-related events have led to a spike in raw material costs. Hurricane Ida dealt another blow to the supply chain. Plant shutdowns associated with Ida further squeezed the supply of raw materials and pushed up their prices. The lingering impacts of supply chain and logistics constrains are likely to reflect on chemical companies’ fourth-quarter results.

Nonetheless, the benefits of self-help actions, including actions to raise selling prices of chemical products to counter the cost inflation and tightness in the supply chain, productivity improvement measures and operational efficiency improvement, might reflect on the results of the companies in this space.

Per the Zacks industry classification, the chemical industry falls under the broader Basic Materials sector. Overall earnings for the sector are projected to rise 79.6% on 29.9% higher revenues, per the latest Earnings Trends report. The projected growth, however, reflects a slowdown from a 136.1% rise in earnings on a 38.7% increase in revenues that was witnessed in the third quarter.

We take a look at three chemical companies that are gearing up to report their fourth-quarter results on Feb 8.

DuPont de Nemours, Inc. (DD - Free Report) will report earnings numbers before the bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -3.30% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for revenues for the fourth quarter for DuPont is currently pinned at $3,946 million, suggesting an expected year-over-year decline of 24.9%. The consensus estimate for earnings is $1.01.

The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters. In this timeframe, DD delivered an earnings surprise of around 9.2%, on average.

Benefits of strong demand and its cost-saving and productivity actions are expected to reflect on its results. However, DuPont’s results are likely to reflect the impacts of raw material cost inflation and challenges in the automotive market due to the chip shortage. (Read more: DuPont Warms Up to Q4 Earnings: What's in the Cards?)

 

DuPont de Nemours, Inc. Price and EPS Surprise

 

DuPont de Nemours, Inc. Price and EPS Surprise

DuPont de Nemours, Inc. price-eps-surprise | DuPont de Nemours, Inc. Quote



FMC Corporation (FMC - Free Report) will report results after the closing bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of -0.59% and a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for fourth-quarter sales for FMC is currently pegged at $1,368 million, suggesting an 18.7% rise year over year. The consensus estimate for earnings is $2.02.

The company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. FMC has a trailing four-quarter earnings surprise of 3.9%, on average.

FMC’s results are likely to have been gained by higher demand, pricing and new products. However, higher raw material and logistics costs are likely to have affected its results. (Read more: FMC Corp to Post Q4 Earnings: What's in Store?)

 

FMC Corporation Price and EPS Surprise

 

FMC Corporation Price and EPS Surprise

FMC Corporation price-eps-surprise | FMC Corporation Quote



Avient Corporation (AVNT - Free Report) will come up with its quarterly results before the bell. Our proven model does not conclusively predict an earnings beat for the company. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #3.

The Zacks Consensus Estimate for Avient’s revenues for the fourth quarter is pegged at $1,148 million, which suggests a year-over-year increase of 15.2%. The consensus estimate for earnings is 55 cents.

Avient beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 10.5%.

Avient is likely to have benefited from improved demand conditions across its end markets, strength in its composite technologies and synergies of the acquisition of Clariant Masterbatch. AVNT is expected to have witnessed strong demand for formulations and services. Strong growth in healthcare and industrial applications is likely to have continued in the fourth quarter. However, cost inflation and supply-chain issues are expected to have affected its performance.

 

Avient Corporation Price and EPS Surprise

 

Avient Corporation Price and EPS Surprise

Avient Corporation price-eps-surprise | Avient Corporation Quote



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