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Celanese Corporation (CE - Free Report) reported first-quarter 2023 earnings from continuing operations of 86 cents per share, plunging from $4.61 in the prior-year quarter.
Adjusted earnings in the first quarter were $2.01 per share, down 63.7% from $5.54 reported a year ago. The bottom line, however, surpassed the Zacks Consensus Estimate of $1.66.
Revenues of $2,853 million increased roughly 12.4% year over year and surpassed the Zacks Consensus Estimate of $2,720.1 million.
The company witnessed increased volumes sequentially in the quarter due to an additional month of sales from the Mobility & Materials (M&M) acquisition as well as demand recovery in Europe and Asia in the reported quarter.
Celanese Corporation Price, Consensus and EPS Surprise
Net sales in the Engineered Materials unit were $1,630 million in the reported quarter, up around 79.1% year over year. The segment reported an operating profit of $112 million, adjusted EBIT of $215 million and operating EBITDA of $327 million in the first quarter.
The Acetyl Chain segment posted net sales of $1,250 million, down roughly 24.3% year over year. The segment generated an operating profit of $278 million, adjusted EBIT of $316 million and operational EBITDA of $370 million in the first quarter.
Financials
Celanese ended the quarter with cash and cash equivalents of $1,167 million, down roughly 22.6% sequentially. Long-term debt was up around 0.2% to $13,396 million.
Cash used in operating activities was $96 million and free cash flow was a negative $261 million in the reported quarter. Capital expenditures amounted to $164 million in the quarter.
The company also returned $76 million to shareholders through dividend payouts during the quarter.
Outlook
Celanese sees adjusted earnings of around $2.50 per share for the second quarter of 2023. The projection includes the expected roughly 30 cents impact from the M&M amortization. It expects sequential earnings growth in its businesses.
Due to increased business performance and the timing of cash items, the company forecasts a considerable improvement in free cash flow in the second quarter.
Price Performance
Celanese’s shares have declined 25.8% in the past year against a 1.1% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
CE currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)
Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 26.6% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 11.9% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 21.8% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 17.7% for the current year. Shares of PPG have gained 9.7% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.
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Celanese's (CE) Q1 Earnings & Revenues Surpass Estimates
Celanese Corporation (CE - Free Report) reported first-quarter 2023 earnings from continuing operations of 86 cents per share, plunging from $4.61 in the prior-year quarter.
Adjusted earnings in the first quarter were $2.01 per share, down 63.7% from $5.54 reported a year ago. The bottom line, however, surpassed the Zacks Consensus Estimate of $1.66.
Revenues of $2,853 million increased roughly 12.4% year over year and surpassed the Zacks Consensus Estimate of $2,720.1 million.
The company witnessed increased volumes sequentially in the quarter due to an additional month of sales from the Mobility & Materials (M&M) acquisition as well as demand recovery in Europe and Asia in the reported quarter.
Celanese Corporation Price, Consensus and EPS Surprise
Celanese Corporation price-consensus-eps-surprise-chart | Celanese Corporation Quote
Segment Highlights
Net sales in the Engineered Materials unit were $1,630 million in the reported quarter, up around 79.1% year over year. The segment reported an operating profit of $112 million, adjusted EBIT of $215 million and operating EBITDA of $327 million in the first quarter.
The Acetyl Chain segment posted net sales of $1,250 million, down roughly 24.3% year over year. The segment generated an operating profit of $278 million, adjusted EBIT of $316 million and operational EBITDA of $370 million in the first quarter.
Financials
Celanese ended the quarter with cash and cash equivalents of $1,167 million, down roughly 22.6% sequentially. Long-term debt was up around 0.2% to $13,396 million.
Cash used in operating activities was $96 million and free cash flow was a negative $261 million in the reported quarter. Capital expenditures amounted to $164 million in the quarter.
The company also returned $76 million to shareholders through dividend payouts during the quarter.
Outlook
Celanese sees adjusted earnings of around $2.50 per share for the second quarter of 2023. The projection includes the expected roughly 30 cents impact from the M&M amortization. It expects sequential earnings growth in its businesses.
Due to increased business performance and the timing of cash items, the company forecasts a considerable improvement in free cash flow in the second quarter.
Price Performance
Celanese’s shares have declined 25.8% in the past year against a 1.1% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
CE currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)
Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 26.6% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 11.9% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 21.8% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 17.7% for the current year. Shares of PPG have gained 9.7% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.