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Chemical Stock Earnings Due on Jan 30: DD, CE, EMN & AXTA

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A few chemical companies are slated to report their quarterly numbers on Jan 30. Per the Zacks industry classification, the chemical industry falls under the broader Basic Materials sector. The Q4 earnings picture for Basic Materials looks glum. Basic Materials is among the Zacks sectors expected to see double-digit decline in earnings in Q4. Overall earnings for the sector are projected to fall 23.2% on 8.7% lower revenues, per the latest Earnings Preview.

Demand weakness is likely to have impacted the performance of chemical companies in Q4. The U.S.-China trade tiff has led to a slowdown in industrial activities globally, hurting demand for chemicals. Chemical makers are seeing soft demand in certain key end-use market such as automotive, electronics and agriculture.

Notably, demand in China, a major consumer of chemicals, remains sluggish amid a weakening Chinese economy. The automotive market over there has slowed considerably, as reflected by falling car sales, owing to the trade conflict. Moreover, weak manufacturing activities have hurt chemical demand in the United States and Europe.

A downturn in industrial demand and a weak global environment are likely to have hurt sales volumes and revenues of chemical companies in the December quarter.

Chemical companies are also likely to have faced headwinds from higher raw materials costs, driven by a spike in crude oil prices. As such, Q4 results are expected to reflect some impact of input cost inflation.

Nevertheless, these companies are benefiting from strategic measures, including cost-cutting and productivity improvement, and actions to raise selling prices. A number of companies have been taking aggressive price increase actions in the wake of raw material cost inflation. Chemical companies also remain actively focused on acquisitions to diversify and drive growth. Benefits of these initiatives might reflect on their Q4 results.

We take a look at four chemical companies that are gearing up to report their results tomorrow.

DuPont de Nemours, Inc. (DD - Free Report) will report earnings numbers ahead of the bell. Our proven model does not conclusively predict an earnings beat for the company this quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, the company has an Earnings ESP of +0.52% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for DuPont’s Q4 revenues is pegged at $5,218 million. Moreover, the consensus estimate for earnings currently stands at 96 cents.

The company’s results are expected to reflect the impact of weak demand. However, it is likely to have benefited from its cost and productivity actions in the quarter.  (Read more: DuPont Warms Up to Q4 Earnings: What's in the Cards?)

 

DuPont de Nemours, Inc. Price and EPS Surprise

 

DuPont de Nemours, Inc. Price and EPS Surprise

DuPont de Nemours, Inc. price-eps-surprise | DuPont de Nemours, Inc. Quote

 

Celanese Corporation (CE - Free Report) will report results after the bell. Our proven model does not conclusively predict an earnings beat for the company this time around. This is because it has an Earnings ESP of -10.71% and a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

Celanese beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. In this timeframe, it delivered a positive surprise of around 1.4%, on average.

The Zacks Consensus Estimate for revenues for Q4 stands at $1,502 million, suggesting year-over-year decline of 11.1%. The consensus estimate for earnings is pegged at $2.09.

The Zacks Consensus Estimate for net sales for the company’s Engineered Materials unit is currently pegged at $592 million for Q4, indicating a 4.8% year-over-year decline. The same for the Acetate Tow division stands at $160 million, essentially flat year over year.  

Moreover, the consensus estimate for the Acetyl Chain segment’s net sales is currently pegged at $792 million, suggesting a 15.4% decline from the year-ago quarter.

The company’s Q4 results will likely reflect the benefits of its productivity actions. However, a weak demand environment is likely to have impacted its performance in the quarter. (Read more: Celanese to Post Q4 Earnings: What's in the Cards?)

 

Celanese Corporation Price and EPS Surprise

 

Celanese Corporation Price and EPS Surprise

Celanese Corporation price-eps-surprise | Celanese Corporation Quote

 

Eastman Chemical Company (EMN - Free Report) will report results after the closing bell. Our proven model does not conclusively predict an earnings beat for the company this time around. This is because it has an Earnings ESP of -2.15% and a Zacks Rank #4.

Eastman Chemical missed the Zacks Consensus Estimate for earnings in each of the trailing four quarters. For this timeframe, the company has an average negative surprise of roughly 6.9%.

The Zacks Consensus Estimate for revenues for Eastman Chemical for Q4 is currently pegged at $2,171 million, indicating a roughly 8.6% year-over-year decline. The consensus estimate for Q4 earnings is $1.33.

Moreover, the Zacks Consensus Estimate for Eastman Chemical’s Additives and Functional Products division revenues is pegged at $771 million, suggesting a 9.4% decline year over year. The consensus estimate for Advanced Materials unit’s revenues is $619 million, indicating a fall of 0.8% year over year.

The Zacks Consensus Estimate for the Chemical Intermediates segment’s revenues stands at $581 million, indicating a 15.7% decline from the year-ago quarter. The same for the Fibers segment is pegged at $207 million, calling for a 2.4% year-over-year decline.

A difficult global business environment and weak demand might have impacted the company’s sales volumes in Q4. However, the company’s earnings are likely to have benefited from its cost management actions and growth in high-margin products. (Read more: What's in Store for Eastman Chemical in Q4 Earnings?)

 

Eastman Chemical Company Price and EPS Surprise

 

Eastman Chemical Company Price and EPS Surprise

Eastman Chemical Company price-eps-surprise | Eastman Chemical Company Quote

 

Axalta Coating Systems Ltd. (AXTA - Free Report) will report results before the bell. Our proven model does not conclusively predict an earnings beat for the company this time around. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #4.

Axalta has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive earnings surprise of 26.2%, on average.

The Zacks Consensus Estimate for revenues for Q4 is currently pegged at $1,112 million, indicating a roughly 4.6% year-over-year decline. The consensus estimate for earnings currently stands at 44 cents.

Moreover, the Zacks Consensus Estimate for revenues from the company’s Performance Coatings division is pinned at $741 million, reflecting a 3.3% year-over-year decline. The same for the Transportation Coatings unit is pegged at $393 million, suggesting a 2% year-over-year decline.

The company’s operating cost reduction and productivity improvement actions are expected to have contributed to its bottom line in Q4. However, volume pressure across global markets is likely to have hurt its sales.
 

Axalta Coating Systems Ltd. Price and EPS Surprise

 

Axalta Coating Systems Ltd. Price and EPS Surprise

Axalta Coating Systems Ltd. price-eps-surprise | Axalta Coating Systems Ltd. Quote

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