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Chemical Stocks Q2 Earnings Slated on Jul 25: CE, CMP, IPHS

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We are heading into the busiest week of the second-quarter earnings season, with a wide swath of companies on the S&P 500 index reporting their quarterly numbers next week. The overall picture remains uninspiring with total Q2 earnings – factoring in the actual results from the 103 S&P 500 members that reported till Jul 21 – expected to dip 3.6% year over year on 0.5% lower revenues, per the latest Earnings Trend report.

This, if it eventually happens, will mark the fifth straight quarter of earnings decline for the benchmark index. The Energy sector is expected to play spoilsport with its total earnings are forecast to plunge 78% year over year on 25.6% lower revenues.

Looking at the chemical space, a bunch of companies are gearing up to report earnings next week. The chemical industry falls under the broader Basic Materials sector. Based on the earnings scorecard as of Jul 21, 25% of the sector participants on the S&P 500 index have unveiled their quarterly numbers. Earnings for these companies are up 1.2% from the same period last year on 4.8% 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 14% on 7.7% lower sales.

The chemical industry is gradually gaining strength after being roiled by the global economic crisis. The industry’s recovery momentum is expected to continue in 2016, 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 industry is not devoid of challenges as a weak agriculture market, slowdown in China, a choppy Europe and sluggish demand in the energy space continue to weigh on the performance of chemical companies.

Let’s take a look at three chemical companies that are slated to report their quarterly results on Jul 25.

Celanese Corporation (CE - Free Report) , which will report second-quarter earnings results after the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.55. The company carries a favorable Zacks Rank #3 (Hold), but its 0.00% ESP makes surprise prediction difficult. Celanese surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 10.70%.
 

CELANESE CP-A Price and EPS Surprise

CELANESE CP-A Price and EPS Surprise | CELANESE CP-A Quote

Compass Minerals International Inc. (CMP - Free Report) will also report its second-quarter numbers after the bell. It has an Earnings ESP of +35.29% as the Most Accurate estimate is 23 cents while the Zacks Consensus Estimate is pegged at 17 cents. However, the stock holds a Zacks Rank #4 (Sell), which we caution against ahead of earnings release. The company outperformed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 11.61%.
 

COMPASS MINERLS Price and EPS Surprise

COMPASS MINERLS Price and EPS Surprise | COMPASS MINERLS Quote

Innophos Holdings Inc has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 50 cents for the second quarter. The company carries a Zacks Rank #3, but its 0.00% ESP makes surprise prediction difficult. Innophos missed estimates in three of last four quarters while it beat on one occasion. 

INNOPHOS HLDGS Price and EPS Surprise

INNOPHOS HLDGS Price and EPS Surprise | INNOPHOS HLDGS Quote

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