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Chemical Stocks' Earnings to Watch on Aug 1: APD, FMC

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A couple of chemical companies are gearing up to report their quarterly numbers on Aug 1. The chemical industry is back on track after being roiled by global economic crisis. Chemical makers are gaining from strategic measures including expansion into high-growth markets, aggressive cost management and productivity actions. The industry is also seeing a pick-up in consolidation activities as chemical makers are increasingly looking to diversify their business and enhance operational scale.

The industry remains exposed to a few challenges including concerns over China’s economy and weak demand in the energy space. However, its momentum is expected to continue through 2017, supported by continued strength across key end-use markets, an upswing in the world economy and significant shale-linked capital investment.

As per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. Based on the latest Earnings Preview, 60% of the sector participants on the S&P 500 index reported their quarterly numbers as of Jul 28. Earnings for these companies are up 9.7% from the same period last year on 4.9% higher revenues. Overall Q2 earnings for the sector are projected to rise 6.2% while revenues are expected to increase 3.3%.

We take a sneak peek at two chemical companies that are scheduled to report their quarterly results on Aug 1.

Air Products and Chemicals, Inc. (APD - Free Report) will report fiscal third-quarter results ahead of the bell. It has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.60. While the stock carries a favorable Zacks Rank #3 (Hold), its 0.00% ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Air Products surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with an average beat of 1.12%. While the company is facing challenges across its business in Latin America and Europe, Middle East, and Africa (EMEA) regions, its cost-control measures, synergies from acquisitions and sustained pricing power should support earnings in the to-be-reported quarter. (Read more: Can Air Products Spring a Surprise in Q3 Earnings?)

FMC Corporation (FMC - Free Report) , which will report second-quarter results after the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 47 cents. The stock carries a Zacks Rank #4 (Sell). We caution against Sell-rated (Zacks Rank #4 or 5) stocks going into the earnings announcement.

The company beat the Zacks Consensus Estimate in two of the trailing four quarters while missed in the other two, delivering an average negative surprise of 1.46%. Although FMC Corp. is exposed to challenging agriculture market conditions and currency headwinds, it should benefit from strategic investments, acquisitions, strength in the lithium business as well as efforts to expand its market position and strengthen its portfolio. (Read more: FMC Corp Q2 Earnings: What's in Store for the Stock?)

FMC Corporation Price and EPS Surprise


FMC Corporation Price and EPS Surprise | FMC Corporation Quote

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