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Celanese's (CE) Q1 Earnings Surpass Estimates, Sales Lag
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Celanese Corporation (CE - Free Report) reported first-quarter 2024 earnings from continuing operations of $1.10 per share, rising from 86 cents in the prior-year quarter.
Adjusted earnings in the first quarter were $2.08 per share, up 3.5% from $2.01 reported a year ago. The bottom line surpassed the Zacks Consensus Estimate of $1.91.
Revenues of $2,611 million decreased roughly 8.5% year over year and missed the Zacks Consensus Estimate of $2,748.6 million.
Celanese Corporation Price, Consensus and EPS Surprise
Net sales in the Engineered Materials unit were $1,378 million in the reported quarter, down around 15.4% year over year. The figure missed the Zacks Consensus Estimate of $1,678.9 million. The segment recorded an operating profit of $89 million and an adjusted EBIT of $201 million in the first quarter. Net sales decreased sequentially, on lower volume and price. Volume was comparable to the previous quarter, with minor improvements in both automotive and distribution volumes, somewhat offset by seasonal declines in medical implants.
The Acetyl Chain segment posted net sales of $1,261 million, up roughly 0.8% year over year. The figure surpassed the Zacks Consensus Estimate of $1,112.5 million. The segment generated an operating profit of $254 million and an adjusted EBIT of $296 million in the first quarter. Volumes were up sequentially as Asia demand increased modestly and the Americas and Europe experienced seasonal recovery. Pricing in the first quarter of the Acetyl Chain rose sequentially.
Financials
Celanese ended the quarter with cash and cash equivalents of $1,483 million, down roughly 17.9% sequentially. Long-term debt was down around 10.4% sequentially to $11,018 million.
Cash provided by operating activities was $101 million and free cash flow was a negative $40 million in the reported quarter. Capital expenditures amounted to $137 million.
The company returned $77 million to shareholders through dividend payouts during the quarter.
Outlook
Celanese sees adjusted earnings in the band of $2.60 to $3 per share for the second quarter of 2024. The projection includes the expected roughly 30 cents impact from the M&M amortization.
The company expects to deliver higher earnings performance in the second quarter and into the second half of 2024 on further improvement in the profitability of its acquired product portfolio, the benefits from its Clear Lake expansion, Uentrop closure and the SAP S/4HANA ERP integration.
Price Performance
Celanese’s shares have increased 56.1% in the past year against a 9.8% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Celanese currently carries a Zacks Rank #3 (Hold).
Sylvamo is slated to report first-quarter results on May 10. The Zacks Consensus Estimate for SLVM’s first-quarter earnings is pegged at $1.05 per share. The consensus estimate for the first quarter has been going up in the past 60 days.
Integra Resources is expected to report first-quarter results on May 10. The consensus estimate for ITRG’s first-quarter earnings is pegged at a loss of 3 cents per share, indicating a year-over-year rise of 85%.
New Found Gold is expected to report first-quarter results on May 10. The consensus estimate for NFGC’s first-quarter earnings is pegged at a loss of 7 cents per share, indicating a year-over-year rise of 12.5%.
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Celanese's (CE) Q1 Earnings Surpass Estimates, Sales Lag
Celanese Corporation (CE - Free Report) reported first-quarter 2024 earnings from continuing operations of $1.10 per share, rising from 86 cents in the prior-year quarter.
Adjusted earnings in the first quarter were $2.08 per share, up 3.5% from $2.01 reported a year ago. The bottom line surpassed the Zacks Consensus Estimate of $1.91.
Revenues of $2,611 million decreased roughly 8.5% year over year and missed the Zacks Consensus Estimate of $2,748.6 million.
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 $1,378 million in the reported quarter, down around 15.4% year over year. The figure missed the Zacks Consensus Estimate of $1,678.9 million. The segment recorded an operating profit of $89 million and an adjusted EBIT of $201 million in the first quarter. Net sales decreased sequentially, on lower volume and price. Volume was comparable to the previous quarter, with minor improvements in both automotive and distribution volumes, somewhat offset by seasonal declines in medical implants.
The Acetyl Chain segment posted net sales of $1,261 million, up roughly 0.8% year over year. The figure surpassed the Zacks Consensus Estimate of $1,112.5 million. The segment generated an operating profit of $254 million and an adjusted EBIT of $296 million in the first quarter. Volumes were up sequentially as Asia demand increased modestly and the Americas and Europe experienced seasonal recovery. Pricing in the first quarter of the Acetyl Chain rose sequentially.
Financials
Celanese ended the quarter with cash and cash equivalents of $1,483 million, down roughly 17.9% sequentially. Long-term debt was down around 10.4% sequentially to $11,018 million.
Cash provided by operating activities was $101 million and free cash flow was a negative $40 million in the reported quarter. Capital expenditures amounted to $137 million.
The company returned $77 million to shareholders through dividend payouts during the quarter.
Outlook
Celanese sees adjusted earnings in the band of $2.60 to $3 per share for the second quarter of 2024. The projection includes the expected roughly 30 cents impact from the M&M amortization.
The company expects to deliver higher earnings performance in the second quarter and into the second half of 2024 on further improvement in the profitability of its acquired product portfolio, the benefits from its Clear Lake expansion, Uentrop closure and the SAP S/4HANA ERP integration.
Price Performance
Celanese’s shares have increased 56.1% in the past year against a 9.8% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Celanese currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include Sylvamo Corporation (SLVM - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Integra Resources Corp. (ITRG - Free Report) and New Found Gold Corp. (NFGC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sylvamo is slated to report first-quarter results on May 10. The Zacks Consensus Estimate for SLVM’s first-quarter earnings is pegged at $1.05 per share. The consensus estimate for the first quarter has been going up in the past 60 days.
Integra Resources is expected to report first-quarter results on May 10. The consensus estimate for ITRG’s first-quarter earnings is pegged at a loss of 3 cents per share, indicating a year-over-year rise of 85%.
New Found Gold is expected to report first-quarter results on May 10. The consensus estimate for NFGC’s first-quarter earnings is pegged at a loss of 7 cents per share, indicating a year-over-year rise of 12.5%.