We are retaining our Neutral recommendation on
) following its mixed third-quarter 2012 results. Adjusted
earnings of 93 cents per share topped the Zacks Consensus
Estimate by a couple of cents.
BASF SE (BASFY): Free Stock Analysis Report
CELANESE CP-A (CE): Free Stock Analysis
DU PONT (EI) DE (DD): Free Stock Analysis
METHANEX CORP (MEOH): Free Stock Analysis
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Revenues fell 11% year over year to $1,609 million and missed the
Zacks Consensus Estimate. Weak pricing and unfavorable currency
translation dragged down sales in the quarter.
The company expects the challenging economic conditions to
continue in Europe in the fourth quarter and the first two
quarters of 2013. However, it sees fourth quarter adjusted
earnings to be modestly higher on a year-over-year basis. For
2013, Celanese expects earnings growth to be driven by the
company-specific initiatives and be consistent with its long-term
growth objective of 12% to 14%.
Celanese is among the world's largest producers of acetyl
products as well as the leading global producer of
high-performance engineered polymers. The company's strong
presence in the emerging markets will enable it to deliver
incremental earnings this year. Moreover, Celanese remains
focused on returning value to its shareholders, backed by strong
Celanese is aggressively expanding capacity in the emerging Asian
markets. Its expansion initiatives in China are expected to
support earnings growth. The company's integrated chemical
complex in Nanjing, China, serves as a base for expansion in
Asia, supporting the region's increasing demand.
However, Celanese is witnessing weak demand and pricing in its
core acetyl business. The challenging economic conditions in
Europe and sluggish growth in Asia may continue to impact its
results moving ahead.
Moreover, Celanese is exposed to volatility in raw material costs
and currency headwinds. The company's balance sheet leverage is
also relatively high, limiting its financial flexibility.
Celanese, which competes with
E. I. Du Pont de Nemours & Co.
), currently retains a short-term Zacks #4 Rank (Sell).