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Celanese (CE) Earnings Beat Estimates in Q1, Revenues Miss
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Celanese Corporation (CE - Free Report) logged earnings from continuing operations of $1.88 per share in first-quarter 2020, down from $2.64 in the year-ago quarter.
Barring one-time items, adjusted earnings were $2.29 a share, down from $2.62 in the year-ago quarter. However, it surpassed the Zacks Consensus Estimate of $2.19.
Revenues of $1,460 million fell 13.5% year over year and missed the Zacks Consensus Estimate of $1,512.2 million. The chemical maker witnessed a demand weakness due to the impacts of the coronavirus outbreak during the reported quarter.
Celanese Corporation Price, Consensus and EPS Surprise
Net sales in the Engineered Materials unit were $563 million in the quarter, down 15% year over year. The segment witnessed lower volumes in Asia due to the impacts of the coronavirus outbreak in the quarter.
The Acetyl Chain segment posted net sales of $799 million, down 10.1% year over year. Sales were affected by a sustained decline in industry pricing due to weakness in Asia demand and underlying raw materials.
Net sales in the Acetate Tow segment were $129 million, down 22.3% year over year.
Financials
Celanese ended the quarter with cash and cash equivalents of $570 million, up 29.3% year over year. Long-term debt was up 14.4% year over year to $3,356 million.
Celanese generated operating cash flow of $259 million and free cash flow of $135 million in the quarter. Capital expenditure was $119 million for the quarter. Moreover, the company completed $150 million in share repurchases during the reported quarter.
Outlook
Celanese expects to generate $300-$400 million of incremental cash on account of the actions that it is presently taking on productivity, working capital management and capital expenditure prioritization that enables it to offset challenges related to demand and earnings in 2020.
The company suspended its earlier announced annual adjusted earnings per share guidance for 2020 due to uncertainties regarding the duration and impact of the coronavirus pandemic.
Price Performance
Celanese’s shares have declined 23.4% in the past year compared with its industry’s 21.5% decline.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Barrick Gold Corporation (GOLD - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Kinross Gold Corporation (KGC - Free Report) .
Barrick Gold currently sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 60.8% for 2020. The company’s shares have gained 112.7% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada has a projected earnings growth rate of 19.2% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 92.4% in a year.
Kinross has a projected earnings growth rate of 50% for 2020. The company’s shares have surged 117.5% in a year. It currently has a Zacks Rank #2.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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Celanese (CE) Earnings Beat Estimates in Q1, Revenues Miss
Celanese Corporation (CE - Free Report) logged earnings from continuing operations of $1.88 per share in first-quarter 2020, down from $2.64 in the year-ago quarter.
Barring one-time items, adjusted earnings were $2.29 a share, down from $2.62 in the year-ago quarter. However, it surpassed the Zacks Consensus Estimate of $2.19.
Revenues of $1,460 million fell 13.5% year over year and missed the Zacks Consensus Estimate of $1,512.2 million. The chemical maker witnessed a demand weakness due to the impacts of the coronavirus outbreak during the reported quarter.
Celanese Corporation Price, Consensus and EPS Surprise
Celanese Corporation price-consensus-eps-surprise-chart | Celanese Corporation Quote
Segment Review
Net sales in the Engineered Materials unit were $563 million in the quarter, down 15% year over year. The segment witnessed lower volumes in Asia due to the impacts of the coronavirus outbreak in the quarter.
The Acetyl Chain segment posted net sales of $799 million, down 10.1% year over year. Sales were affected by a sustained decline in industry pricing due to weakness in Asia demand and underlying raw materials.
Net sales in the Acetate Tow segment were $129 million, down 22.3% year over year.
Financials
Celanese ended the quarter with cash and cash equivalents of $570 million, up 29.3% year over year. Long-term debt was up 14.4% year over year to $3,356 million.
Celanese generated operating cash flow of $259 million and free cash flow of $135 million in the quarter. Capital expenditure was $119 million for the quarter. Moreover, the company completed $150 million in share repurchases during the reported quarter.
Outlook
Celanese expects to generate $300-$400 million of incremental cash on account of the actions that it is presently taking on productivity, working capital management and capital expenditure prioritization that enables it to offset challenges related to demand and earnings in 2020.
The company suspended its earlier announced annual adjusted earnings per share guidance for 2020 due to uncertainties regarding the duration and impact of the coronavirus pandemic.
Price Performance
Celanese’s shares have declined 23.4% in the past year compared with its industry’s 21.5% decline.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Barrick Gold Corporation (GOLD - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Kinross Gold Corporation (KGC - Free Report) .
Barrick Gold currently sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 60.8% for 2020. The company’s shares have gained 112.7% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada has a projected earnings growth rate of 19.2% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 92.4% in a year.
Kinross has a projected earnings growth rate of 50% for 2020. The company’s shares have surged 117.5% in a year. It currently has a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>