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Chemical Stocks' Earnings to Watch This Week: PPG, SCL, SXT
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The second-quarter earnings season is in its early stage with 36 companies on the S&P 500 index having reported their quarterly numbers thus far. The picture is tepid as Q2 earnings are expected to take a dip despite a positive start by major banks this season.
Per the latest Earnings Trend report, factoring in the actual results from the S&P 500 members that reported till last Friday, total Q2 earnings are expected to skid 5.4% year over year on 0.5% lower revenues with the Energy sector being a major drag. This, if it eventually happens, will mark the fifth straight quarter of earnings decline for the benchmark index.
In this write-up, we put the spotlight on a few chemical companies that are schedule to report this week. The chemical industry falls under the broader Basic Materials sector. Based on the earnings scorecard as of Jul 15, 10% of the sector participants on the S&P 500 index have unveiled their quarterly numbers. Earnings for these companies are down 16% from the same period last year on 9.5% lower revenues.
The sector is one among the nine out of the 16 Zacks sectors that are expected to see negative earnings growth in the second quarter with an expected earnings decline of 15.1% on 7.5% lower sales.
The chemical industry is still on a gradual recovery mode from the trough of the great recession. The industry’s recovery is expected to continue this year, supported by continued strength in the automotive market, positive trends in the construction space and significant shale-linked capital investment.
Chemical makers are gaining from strategic measures including expansion into high-growth markets, aggressive cost management and productivity actions as well as acquisitions. However, the chemical industry is still feeling the bite of a slowdown in China, a choppy Europe, a weak agriculture market and sluggish demand in the energy space.
We take a sneak peek at three chemical companies that are gearing up to report their results this week.
PPG Industries, Inc. (PPG - Free Report) , which will report ahead of the opening bell on Jul 21, should continue to benefit from synergies of acquisitions and its cost-management initiatives through its restructuring program. It should also gain from continued strength across North American automotive and aerospace markets. However, the company is exposed to currency headwinds which may weigh on its second-quarter earnings. (Read more: PPG Industries: Can Q2 Earnings Pull a Surprise?)
PPG Industries, which carries a Zacks Rank #3 (Hold), has an Earnings ESP of -0.54% for the second quarter. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 0.97%.
Stepan Company (SCL - Free Report) will report its second-quarter numbers before the bell on Jul 20. The company is expected to come up with a positive earnings surprise as it sports a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of +0.86%.
The company outperformed the Zacks Consensus Estimate in three of the trailing four quarters with an average beat of 18.32%. While Stepan should benefit from lower costs and enhanced operational efficiencies, it faces currency translation headwinds and weak construction activities in China.
Sensient Technologies Corporation (SXT - Free Report) , which is slated to report second-quarter results after the bell on Jul 21, has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 79 cents. Sensient is seeing strong momentum in its natural colors business and should benefit from its ongoing efforts to reduce costs. But it is exposed to currency headwinds.
The company holds a Zacks Rank #3. But it has a 0.00% ESP, which makes surprise prediction difficult. The company has met estimates in three of the four trailing quarters while it beat on one occasion.
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Chemical Stocks' Earnings to Watch This Week: PPG, SCL, SXT
The second-quarter earnings season is in its early stage with 36 companies on the S&P 500 index having reported their quarterly numbers thus far. The picture is tepid as Q2 earnings are expected to take a dip despite a positive start by major banks this season.
Per the latest Earnings Trend report, factoring in the actual results from the S&P 500 members that reported till last Friday, total Q2 earnings are expected to skid 5.4% year over year on 0.5% lower revenues with the Energy sector being a major drag. This, if it eventually happens, will mark the fifth straight quarter of earnings decline for the benchmark index.
In this write-up, we put the spotlight on a few chemical companies that are schedule to report this week. The chemical industry falls under the broader Basic Materials sector. Based on the earnings scorecard as of Jul 15, 10% of the sector participants on the S&P 500 index have unveiled their quarterly numbers. Earnings for these companies are down 16% from the same period last year on 9.5% lower revenues.
The sector is one among the nine out of the 16 Zacks sectors that are expected to see negative earnings growth in the second quarter with an expected earnings decline of 15.1% on 7.5% lower sales.
The chemical industry is still on a gradual recovery mode from the trough of the great recession. The industry’s recovery is expected to continue this year, supported by continued strength in the automotive market, positive trends in the construction space and significant shale-linked capital investment.
Chemical makers are gaining from strategic measures including expansion into high-growth markets, aggressive cost management and productivity actions as well as acquisitions. However, the chemical industry is still feeling the bite of a slowdown in China, a choppy Europe, a weak agriculture market and sluggish demand in the energy space.
We take a sneak peek at three chemical companies that are gearing up to report their results this week.
PPG Industries, Inc. (PPG - Free Report) , which will report ahead of the opening bell on Jul 21, should continue to benefit from synergies of acquisitions and its cost-management initiatives through its restructuring program. It should also gain from continued strength across North American automotive and aerospace markets. However, the company is exposed to currency headwinds which may weigh on its second-quarter earnings. (Read more: PPG Industries: Can Q2 Earnings Pull a Surprise?)
PPG Industries, which carries a Zacks Rank #3 (Hold), has an Earnings ESP of -0.54% for the second quarter. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 0.97%.
PPG INDS INC Price and EPS Surprise
PPG INDS INC Price and EPS Surprise | PPG INDS INC Quote
Stepan Company (SCL - Free Report) will report its second-quarter numbers before the bell on Jul 20. The company is expected to come up with a positive earnings surprise as it sports a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of +0.86%.
The company outperformed the Zacks Consensus Estimate in three of the trailing four quarters with an average beat of 18.32%. While Stepan should benefit from lower costs and enhanced operational efficiencies, it faces currency translation headwinds and weak construction activities in China.
STEPAN CO Price and EPS Surprise
STEPAN CO Price and EPS Surprise | STEPAN CO Quote
Sensient Technologies Corporation (SXT - Free Report) , which is slated to report second-quarter results after the bell on Jul 21, has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 79 cents. Sensient is seeing strong momentum in its natural colors business and should benefit from its ongoing efforts to reduce costs. But it is exposed to currency headwinds.
The company holds a Zacks Rank #3. But it has a 0.00% ESP, which makes surprise prediction difficult. The company has met estimates in three of the four trailing quarters while it beat on one occasion.
SENSIENT TECH Price and EPS Surprise
SENSIENT TECH Price and EPS Surprise | SENSIENT TECH Quote
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