Chemical and advanced materials maker
) reported first-quarter 2013 adjusted earnings (excluding
one-time items) of $1.14 per share, outperforming the Zacks
Consensus Estimate of 79 cents and exceeding the year-ago
earnings of 79 cents per share by 44%.
Earnings (as reported) from continuing operation were 88 cents
a share in the quarter, down 27% from $1.21 recorded a year
Sales for the quarter were $1,605 million, down 1.7% year over
year, missing the Zacks Consensus Estimate of $1,608 million.
Advanced Engineered Materials:
Sales increased 3.8% year over year to $329 million in the first
quarter despite a 9% year over year decline in auto builds in
Europe. Celanese achieved an all-time first quarter record due to
constant success in global auto penetration and its innovation
activities. The segment's earnings before interest and taxes
(EBIT) also increased 11% in the quarter due to improved global
product mix, mainly medical applications.
Sales jumped 11.7% year over year to $295 million. The segment's
adjusted EBIT increased by $50 million to $108 million.
The increase was driven by cash dividend from the company's
China acetate ventures and continued strong demand in acetate and
lower energy costs related to the Spondon acetate facility.
Beginning from the first quarter, Celanese anticipates that it
will receive quarterly dividend from the Chinese ventures rather
than annual dividend.
Net sales decreased 6.8% from the year-ago quarter to $288
million. Volumes decreased 3% on lower emulsion demand in North
America and Europe, offset by stronger demand in Asia for Vinyl
Acetate Ethylene (VAE) applications. Adjusted EBIT declined 27.3%
to $16 million due to lower demand for photovoltaic applications
in Ethylene Vinyl Acetate and lower raw material costs, primarily
ethylene, in Emulsions.
The segment witnessed a 5.2% decline in sales to $808 million,
due to lower acetyl pricing and demand. Adjusted EBIT increased
by 22% to $79 million due to cost efficiencies and lower raw
Cash and cash equivalents were $978 million as of Mar 31,
2013, versus $727 million as of Mar 31, 2012. The company's
long-term debt stood at $2,959 million as of Mar 31, 2013,
compared with $2,875 million as of Mar 31, 2012. Celanese
generated $147 million in cash from operating activities in the
first quarter of 2013, compared with $215 million in cash
generated from operating activities in the year-ago quarter.
Celanese expects the challenging economic conditions to
persist throughout 2013. For 2013, it expects earnings growth on
the back of company-specific initiatives and to be consistent
with its long-term growth objective of 12% to 14%, despite higher
2012 earnings base after its pension accounting policy change.
The company remains focused on enhancing the competitiveness of
its products through technological innovations.
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 in 2013.
Celanese continues to offer value-added solutions to its
customers. It is aggressively expanding capacity in the emerging
Asian markets. Its expansion initiatives in China are expected to
support earnings growth.
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 impact the company's
Celanese currently carries a short-term (1 to 3 months) Zacks
Rank #3 (Hold).
Other companies in the chemical industry having favorable
Zacks Rank are
Compass Minerals International Inc.
Eastman Chemical Company
) While Olin holds a Zacks Rank #1 (Strong Buy), Compass and
Eastman carry a Zacks Rank #2 (Buy).
CELANESE CP-A (CE): Free Stock Analysis
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EASTMAN CHEM CO (EMN): Free Stock Analysis
OLIN CORP (OLN): Free Stock Analysis Report
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