Chemical and advanced materials maker
) saw its profit jump in second-quarter 2014 on higher margins
across its Advanced Engineered Materials, Industrial Specialties
and Acetyl Intermediates segments.
Profit from continuing operations (as reported) soared 94% year
over year to $258 million or $1.66 per share in the quarter from
$133 million or 83 cents per share posted in the prior-year
Adjusted earnings (excluding one-time items) of $1.47 per share
jumped 31% from $1.12 per share reported in the year-ago quarter.
It also outstripped the Zacks Consensus Estimate of $1.23.
Celanese Corporation - Earnings Surprise |
Revenues and Margins
Sales rose 7% year over year to $1,769 million in the quarter,
coming ahead of the Zacks Consensus Estimate of $1,723
Consolidated segment income margin rose to 18.6% from roughly
16% a year ago, boosted by the company's continued efforts to
deliver customer centric-applications and strategic actions to
leverage current industry trends.
Advanced Engineered Materials:
The segment's income margin increased 170 basis points (bps) on a
sequential basis to 24.2% in the quarter on record sales of $389
million. The results were driven by the ability of the division to
develop products and applications that are tailored per customers'
requirements. Volumes rose 4% sequentially on strong demand of
advanced polymers in autos. Reported operating profit came in at
$56 million in the quarter.
Income margin was 37% in the reported quarter on income of
$107 million. The division's income fell sequentially, impacted by
interruptions in plant operations at Celanese's cellulose
derivatives facility in Virginia due to power outage. Volumes fell
3% sequentially while pricing declined by less than 1%. Segment
operating profit was $80 million.
Income margin rose 20 bps sequentially on income of $22 million.
Volumes went up 2% sequentially, helped by improved demand for
Ethylene Vinyl Acetate (EVA) polymers in North America. Pricing
rose 4% sequentially in response to increased raw material costs as
well as better product mix in EVA polymers . Operating profit
came in at $24 million in the quarter.
Income margin increased 480 bps sequentially to 16.2% on income of
$146 million. The results were driven by higher pricing and
strategic actions by the company. Pricing increased 6%, partly due
to the company's strategic measures at the non-integrated
facilities in Europe. Operating profit came in at $143 million in
Celanese exited the quarter with cash and cash equivalents were
$1,064 million, down 4% year over year. The company's long-term
debt was $2,880 million, essentially flat year over year. Celanese
generated operating cash flows of $253 million in the reported
quarter on the back of strong earnings.
Celanese deployed $39 million of cash on dividends and $50
million on share repurchases during the quarter and had $297
million remaining under its existing repurchase authorization as of
Jun 30, 2014.
Celanese, during the quarter, raised its quarterly dividend by
39% to 25 cents per share from the prior payout of 18 cents a
Based on its strong first-half performance, Celanese now expects
adjusted earnings growth of 15% to 17% for 2014, versus 12% to 14%
expected earlier. It said that it will focus more on
company-specific initiatives for 2015 (including innovation and
productivity programs) which will help it offset expected headwind
associated with the expiry of a methanol contract in
Celanese currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the chemical space are
Marrone Bio Innovations, Inc.
LyondellBasell Industries NV
). While Marrone Bio Innovations sports a Zacks Rank #1 (Strong
Buy), Ashland and LyondellBasell carry a Zacks Rank #2 (Buy).
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