Chemical and advanced materials maker
) said that its Board has raised its share repurchase
authorization to $400 million. At the end of 2013, the company
had authorization to buyback shares worth $228 million under its
The increase in share repurchase authorization testifies
Celanese's ability to generate strong cash flows. The
authorization provides it discretion in determining the timing
and conditions under which shares may be bought back.
Investors responded positively and the Texas-based company's
shares rose as much as around 3.7% in the trading session last
Celanese continues to generate strong cash flows and remains
focused on returning value to its shareholders. Its cash flow
from operating activities rose around 6% year over year to $762
million in 2013 (including $154 million in the fourth quarter) on
the back of strong earnings.
Celanese deployed $164 million of cash to buyback roughly 3.2
million shares in 2013 and raised its annual dividend twice
during the year. The company ended the year with cash and cash
equivalents of $984 million, up roughly 3% year over year.
Celanese expects earnings growth on the back of
company-specific initiatives, to be consistent with its long-term
growth plan. These initiatives, including innovation of new
products and enhancement of efficiencies through productivity,
are expected to drive earnings in 2014.
Celanese is focusing on trimming costs and running its plants
more efficiently to counter weak demand. Moreover, it is
aggressively expanding capacity in the emerging Asian markets.
The company's strong presence in these markets should enable it
to deliver incremental earnings this year and next.
Celanese is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical industry worth considering
Northern Technologies International Corp.
The Dow Chemical Co.
). While both Methanex and Northern Technologies carry a Zacks
Rank #1 (Strong Buy), Dow Chemical holds a Zacks Rank #2
CELANESE CP-A (CE): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
METHANEX CORP (MEOH): Free Stock Analysis
NORTHERN TECH (NTIC): Free Stock Analysis
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