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Can Chemical Stocks UNVR, KRO Q1 Earnings Surprise on May 5?

A couple of chemical companies are lined up to report their quarterly numbers on May 5. The chemical industry is back on track after being in a rut for long. Strength in the automotive sector and a rebound in non-residential construction and housing markets have pulled the industry out of its funk, despite a persistently challenging global economic environment.

Chemical companies continue to shift their focus to attractive, growth markets in an effort to cut their exposure to other businesses that are grappling with weak demand. The industry is also seeing a pick-up in consolidation activities (exhibited by a wide swath of deals in the recent past) as chemical makers are increasingly looking for cost synergy opportunities and enhanced operational scale in a still-difficult global economic environment.

Notwithstanding lingering headwinds like concerns over China's economy and weak demand in the energy space, the industry's recovery momentum is expected to continue in 2017, supported by continued strength in the light vehicles market, positive trends in the construction space and significant shale-linked capital investment. Cost-cutting measures and productivity improvement actions by chemical companies are also expected to yield industry-wide margin improvement.

As per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. Based on the Earnings Outlook as of May 3, 85% of the sector participants on the S&P 500 index have reported their quarterly numbers. Earnings for these companies increased 18.1% from the same period last year on 5.7% higher revenues.

Basic Materials is among the five sectors that are projected to witness double-digit earnings growth in the first quarter. Overall earnings for the sector are projected to rise 15.9% while revenues are expected to increase 2.1%.

We take a sneak peek into two chemical companies that are slated to report their first-quarter results on May 5.

Univar Inc.UNVR has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 22 cents. Although the stock carries a Zacks Rank #1 (Strong Buy), its 0.00% ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Univar beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and reported in line on another occasion, delivering an average positive surprise of 18.67%. While industrial demand is expected to remain sluggish and volatility from oil and gas is likely to persist, the company's productivity actions and organic growth initiatives are expected to offset some of the negative impacts in the to-be-reported quarter. (Read more: Will Univar Spring a Surprise this Earnings Season? )

Univar Inc. Price and EPS Surprise

Univar Inc. Price and EPS Surprise | Univar Inc. Quote

Kronos Worldwide, Inc.KRO has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents. While the stock carries a Zacks Rank #1, its 0.00% ESP makes surprise prediction difficult. You can see the complete list of today's Zacks #1 Rank stocks here .

The company beat estimates in three of the trailing four quarters, delivering an average positive surprise of 72.01%.

Kronos Worldwide Inc Price and EPS Surprise

Kronos Worldwide Inc Price and EPS Surprise | Kronos Worldwide Inc Quote

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Kronos Worldwide Inc (KRO): Free Stock Analysis Report

Univar Inc. (UNVR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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