Chemical and advanced materials maker
) third-quarter 2013 adjusted earnings (excluding one-time items)
of $1.20 per share beat the Zacks Consensus Estimate of
Earnings (as reported) from continuing operation were $1.07
per share in the quarter, up roughly 34% from 80 cents recorded a
Sales in the quarter were $1,636 million, up 1.7% year over
year, but missed the Zacks Consensus Estimate of $1,643
Advanced Engineered Materials:
Sales decreased 1.7% sequentially to $346 million in the third
quarter despite lower sequential auto builds in Europe and the
U.S. The segment's adjusted earnings before interest and taxes
(EBIT) decreased 5.8% sequentially and income margin decreased to
23.4% in the quarter due to the impact of turnaround activity at
the company's Middle East affiliate. However, operating profit
increased due to improved mix of higher-value medical
applications, lower raw material costs and focused spending
Sales declined 1.3% sequentially to $310 million in the quarter.
The segment's adjusted EBIT and income margin remained flat with
the prior quarter at $108 million and 34.8%, respectively.
Increased global demand for acetate tow led to sequential volumes
and price increases.
Net sales increased 1.4% from the previous quarter to $299
million. Adjusted EBIT increased 31.6% sequentially to $25
million due to higher EVA polymers volumes sold in North America
and Asia. Volumes increased 3%, while price decreased 3% due to
lower raw material costs. The segment also benefitted from
focused spending initiatives.
The segment's sales declined 1.7% from the previous quarter and
came in at $795 million. Adjusted EBIT increased 9% sequentially
to $72 million owing to less turnaround activity than in the
prior quarter. Prices declined 1% due to lower raw materials
costs and volumes also decreased 1%.
Cash and cash equivalents were $1,100 million as of Sep 30,
2013, versus $959 million as of Dec 31, 2012. The company's
long-term debt stood at $2,870 million as of Sep 30, 2013,
compared with $2,930 million as of Dec 31, 2012. Celanese
generated $232 million in cash from operating activities in the
reported quarter on the back of strong earnings.
Celanese has increased the company's quarterly common stock
dividend by 100%, effective Jul 25, 2013. On a quarterly basis,
the dividend increased from 9 cents to 18 cents per share. On
annual basis, it increased to 72 cents per share from 36 cents
Memorandum of Understanding
Celanese and PetroChina have signed a Memorandum of
Understanding (MoU) to advance the development of synthetic fuel
ethanol opportunities in China. Celanese's proprietary TCX
ethanol process technology will be put to use for the
development. Celanese will leverage PetroChina's position as the
largest oil and gas producer and distributor in China to explore
the growing Chinese fuel ethanol market and would work along with
stakeholders in the country to showcase the benefits of its TCX
For 2014, Celanese expects earnings growth on the back of
company-specific initiatives to be consistent with its long-term
growth plan. The company-specific initiatives including
innovation of new products and enhancement of efficiencies
through productivity are expected to drive earnings growth in
Celanese currently carries a Zacks Rank #4 (Sell).
Other companies in the chemical industry worth considering are
Akzo Nobel NV
Air Products & Chemicals Inc.
). All of them hold a Zacks Rank #2 (Buy).
AKZO NOBEL NV (AKZOY): Get Free Report
AIR PRODS & CHE (APD): Free Stock Analysis
BASF SE (BASFY): Get Free Report
CELANESE CP-A (CE): Free Stock Analysis
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