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Celanese (CE) Beats Earnings and Revenue Estimates in Q4

Celanese CorporationCE , a chemical and advanced materials producer, kept its earnings streak alive with a beat in fourth-quarter 2017.

The company logged adjusted earnings per share of $1.98 in the quarter, up 30.3% from $1.52 a year ago. The figure surpassed the Zacks Consensus Estimate of $1.86.

Also, revenues of $1,593 million were up roughly 21.5% year over year. The top line outpaced the Zacks Consensus Estimate of $1,530 million.

FY17 Results

For 2017, the company posted profits from continuing operations of $856 million or $6.19 per share, compared with $902 million or $6.19 per share a year ago. Adjusted earnings for the year came in at $7.51 per share, up 13.6% from $6.61 in 2016.

Additionally, Celanese reported revenues of $6.1 billion, up around 13.9% from $5.4 billion reported in 2016.

Celanese Corporation Price, Consensus and EPS Surprise

Celanese Corporation Price, Consensus and EPS Surprise | Celanese Corporation Quote

Segment Review

Material Solutions : At this segment, the Advanced Engineered Materials (AEM) unit delivered operating profit of $91 million and record adjusted EBIT of $135 million.

Tow volume and pricing declined in the quarter mainly as a result of lower tow industry utilization which was in line with the company's expectations.

Acetyl Chain : The unit is well-positioned and the flexibility in its global supply chain allowed it to rapidly respond to changes in utilization rates, particularly in China. Operating profit was $176 million in the fourth quarter, up 104.7% year over year.

Financials

Cash and cash equivalents were $576 million as of Dec 31, 2017, down 9.7% year over year. Long-term debt was up 14.7% to $3,315 million as of Dec 31, 2017. Capital expenditure in 2017 was $267 million.

For 2017, Celanese generated operating cash flow of $803 million and free cash flow of $825 million (before taking into account $316 million of contribution to pension plans). Furthermore, the company returned $741 million to shareholders in 2017, including $241 million of dividends.

Outlook

Going forward, the company expects the AEM pipeline model to evolve to an increased level of project volume and the Acetyl Chain unit to continue the momentum from its improved model. Tow earnings is anticipated to remain relatively flat. In 2018, Celanese expects its adjusted earnings to grow in the 10-14% range with more growth to be witnessed in the first half of the year.

Price Performance

Celanese has outperformed the industry in a year's time. While shares of the company have rallied around 32.4%, the industry gained roughly 28.4% over the same period.

Zacks Rank & Stocks to Consider

Celanese carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the chemical space are Kronos Worldwide Inc. KRO , Methanex Corporation MEOH and BASF SE BASFY . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Kronos has an expected long-term earnings growth of 5%. Its shares have skyrocketed 117.8% over a year.

Methanex has an expected long-term earnings growth of 15%. Shares of the company have rallied 22.7% in a year.

BASF has an expected long-term earnings growth of 8.7%. Shares of the company were up 23% in a year.

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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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