A few chemical companies are slated to report their quarterly results on Nov 8. The chemical industry remains on the road to recovery, aided by strength across the automotive and construction markets. Chemical makers are gaining from strategic measures including expansion into high-growth markets, aggressive cost management, acquisitions and investments in capacity expansion.
However, the chemical industry remains hamstrung by a number of challenges including depressed demand in the agricultural and energy markets, a sluggish Chinese economy and headwinds from a strong dollar.
As per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. Based on the earnings scorecard as of Nov 4, 85% of the sector participants on the S&P 500 index have already reported their quarterly numbers. Earnings for these companies have increased 6.4% from the same period last year while revenues are down 2.5%, per the latest Earnings Preview. Overall earnings for the sector are expected to rise 4.2% on 3.2% lower sales.
We take a sneak peek into three chemical companies that are gearing up to report their quarterly results on Nov 8.
Ashland Global Holdings Inc. (ASH - Free Report) will report fiscal fourth-quarter results after the bell. The company has a Zacks Rank #4 (Sell) and an Earnings ESP of -19.14%, making it difficult to predict an earnings beat. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Ashland beat estimates in three of the trailing four quarters, with an average positive surprise of 2.35%.
Westlake Chemical Corp. (WLK - Free Report) which will report third-quarter results before the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 90 cents. Since this results in an Earnings ESP of 0.00%, surprise prediction becomes difficult in spite of the company’s favorable Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Westlake Chemical delivered an average positive earnings surprise of 5.59% over the trailing four quarters. The company’s income from operations in the to-be-reported quarter are expected to be unfavorably impacted by lost production, unabsorbed fixed manufacturing costs, other costs related to the turnaround and the unplanned outage at the Calvert City facility. The company also continues to be negatively impacted by low crude oil prices. (Read more: What's in Store for Westlake Chemical's Q3 Earnings?)
Valvoline Inc. (VVV - Free Report) will report fiscal fourth-quarter results after the close. The company is expected to come up with a positive earnings surprise as it has an Earnings ESP of +3.13% and a Zacks Rank #3.
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