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Celanese (CE) Earnings Lag Estimates in Q3, Revenues Beat
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Celanese Corporation (CE - Free Report) logged earnings from continuing operations of $1.76 per share in third-quarter 2022, down from $4.67 in the year-ago quarter.
Barring one-time items, adjusted earnings were $3.94 per share, down from $4.82 in the year-ago quarter. It missed the Zacks Consensus Estimate of $3.98.
Revenues of $2,301 million increased roughly 1.5% year over year and beat the Zacks Consensus Estimate of $2,293.5 million.
The company witnessed lower pricing and volumes on a sequential comparison basis and unfavorable currency impact in the reported quarter.
Celanese Corporation Price, Consensus and EPS Surprise
Net sales in the Engineered Materials unit were $929 million in the reported quarter, up around 36% year over year. The segment witnessed higher pricing on a sequential comparison basis while volumes fell in the quarter. Volumes declined 1% and pricing increased 2% sequentially.
The Acetyl Chain segment posted net sales of $1,274 million, down roughly 14% year over year. The segment witnessed a 4% sequential decline in volume resulting from weaker demand mainly in European and Chinese paints, coatings and construction applications. Prices fell 7% sequentially due to moderation in acetic acid and VAM pricing in China.
Net sales in the Acetate Tow segment were $135 million, up around 5% year over year. The company witnessed 3% higher pricing and a 10% increase in volume in the segment on a sequential-comparison basis.
Financials
Celanese ended the quarter with cash and cash equivalents of $9,671 million, up roughly seven-fold year over year. Long-term debt was up around 205% year over year to $11,360 million.
Celanese generated an operating cash flow of $467 million and a free cash flow of $325 million in the third quarter. Capital expenditures amounted to $139 million.
The company also returned $73 million to shareholders through dividend payouts during the quarter.
Outlook
Celanese sees adjusted earnings of $1.50-$2.00 per share for the fourth quarter. The projection includes the expected impact from the Mobility & Materials (M&M) acquisition in November and December. The company completed the M&M buyout on Nov 1, 2022.
Based on the current order books, the company believes that the remainder of 2022 and the start of 2023 will be challenged by typical winter seasonality and continued demand softness in certain end-markets as well as customer destocking.
Price Performance
Celanese’s shares have declined 43.3% in the past year compared with a 33.4% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Celanese currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Albemarle Corporation (ALB - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) .
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 43% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle, currently sporting a Zacks Rank #1, has a projected earnings growth rate of 430.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 2% in a year.
Reliance Steel, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.
Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 22% in a year.
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Celanese (CE) Earnings Lag Estimates in Q3, Revenues Beat
Celanese Corporation (CE - Free Report) logged earnings from continuing operations of $1.76 per share in third-quarter 2022, down from $4.67 in the year-ago quarter.
Barring one-time items, adjusted earnings were $3.94 per share, down from $4.82 in the year-ago quarter. It missed the Zacks Consensus Estimate of $3.98.
Revenues of $2,301 million increased roughly 1.5% year over year and beat the Zacks Consensus Estimate of $2,293.5 million.
The company witnessed lower pricing and volumes on a sequential comparison basis and unfavorable currency impact in the reported quarter.
Celanese Corporation Price, Consensus and EPS Surprise
Celanese Corporation price-consensus-eps-surprise-chart | Celanese Corporation Quote
Segment Review
Net sales in the Engineered Materials unit were $929 million in the reported quarter, up around 36% year over year. The segment witnessed higher pricing on a sequential comparison basis while volumes fell in the quarter. Volumes declined 1% and pricing increased 2% sequentially.
The Acetyl Chain segment posted net sales of $1,274 million, down roughly 14% year over year. The segment witnessed a 4% sequential decline in volume resulting from weaker demand mainly in European and Chinese paints, coatings and construction applications. Prices fell 7% sequentially due to moderation in acetic acid and VAM pricing in China.
Net sales in the Acetate Tow segment were $135 million, up around 5% year over year. The company witnessed 3% higher pricing and a 10% increase in volume in the segment on a sequential-comparison basis.
Financials
Celanese ended the quarter with cash and cash equivalents of $9,671 million, up roughly seven-fold year over year. Long-term debt was up around 205% year over year to $11,360 million.
Celanese generated an operating cash flow of $467 million and a free cash flow of $325 million in the third quarter. Capital expenditures amounted to $139 million.
The company also returned $73 million to shareholders through dividend payouts during the quarter.
Outlook
Celanese sees adjusted earnings of $1.50-$2.00 per share for the fourth quarter. The projection includes the expected impact from the Mobility & Materials (M&M) acquisition in November and December. The company completed the M&M buyout on Nov 1, 2022.
Based on the current order books, the company believes that the remainder of 2022 and the start of 2023 will be challenged by typical winter seasonality and continued demand softness in certain end-markets as well as customer destocking.
Price Performance
Celanese’s shares have declined 43.3% in the past year compared with a 33.4% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Celanese currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Albemarle Corporation (ALB - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) .
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 43% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle, currently sporting a Zacks Rank #1, has a projected earnings growth rate of 430.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 2% in a year.
Reliance Steel, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.
Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 22% in a year.