Celanese Corporation CE is scheduled to release third-quarter 2024 results after the closing bell on Nov. 4.
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The company surpassed Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice. CE delivered a trailing four-quarter earnings surprise of around 1.3% on average.
Celanese's investment in high-return organic projects, cost-cutting initiatives and acquisition synergies are likely to have contributed to its third-quarter performance. CE is expected to have faced headwinds from sluggish demand in certain end markets as well as pricing pressure.
CE stock has gained 10.8% in the past year against the Zacks Chemicals Specialty industry’s 1.4% rise.
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Let’s see how things are shaping up for the upcoming announcement.
What Do Celanese’s Revenue Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,685 million, which implies a decline of 1.4% from the year-ago reported number.
Our estimate for Celanese’s Engineered Materials division’s revenues is pegged at $1,609.5 million, suggesting a rise of 5.3% year over year. The same for the Acetyl Chain unit’s revenues is $1,162.1 million, indicating a fall of 4.8%.
Factors at Play for CE Stock
Celanese's strategic acquisitions, productivity initiatives and investments in organic projects are expected to have aided its performance in the third quarter. Celanese's acquisitions are expected to generate opportunities for future growth, investment and synergy. Its acquisition of the majority of DuPont's Mobility & Materials ("M&M") division has enabled it to expand its presence in high-value applications. CE anticipates incremental M&M synergies of at least $150 million in 2024. The Engineered Materials unit is expected to have gained from incremental synergies in the third quarter.
Celanese is also focused on implementing its productivity programs, which include the implementation of many cost-cutting capital projects. Productivity initiatives are likely to have supported its profits in the September quarter. The company is taking steps to implement strategic initiatives, factoring in the volatility and unpredictability of the current market landscape and competitive climate. These initiatives include improving its commercial teams, adjusting production and inventory levels to meet current demand, implementing cost-cutting measures and optimizing cash flow. These activities are expected to generate significant cash and sustain earnings growth.
Celanese, earlier this year, completed the start-up of a new 1.3-million-ton Clear Lake acetic acid expansion unit. The Clear Lake expansion is expected to have contributed to its margins in the third quarter.
CE is facing headwinds due to weaker demand in some of its end markets. Demand remains sluggish in industrial and consumer goods end markets. CE is seeing weak demand in markets including paint, coatings and building & construction. Demand in Europe and Asia is also expected to have remained subdued in the third quarter. The company's volumes are likely to have been impacted by a slower global demand recovery.
Celanese is also being challenged by significant competition. Competitive pressure is hurting its prices as witnessed in the second quarter. The pricing pressure is likely to have continued in the third quarter due to the challenging competitive dynamics.
Celanese Corporation Price and EPS Surprise
Celanese Corporation price-eps-surprise | Celanese Corporation Quote
What Our Model Unveils for CE Stock
Our proven model does not conclusively predict an earnings beat for Celanese this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for CE is -2.88%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $2.84. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CE currently carries a Zacks Rank #5 (Strong Sell).
Basic Materials Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
DuPont de Nemours, Inc. DD, slated to release earnings on Nov. 5, has an Earnings ESP of +1.00% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for DD’s third-quarter earnings is currently pegged at $1.03.
Kinross Gold Corporation KGC, scheduled to release third-quarter earnings on Nov. 5, has an Earnings ESP of +8.76%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the third quarter is currently pegged at 17 cents. KGC currently carries a Zacks Rank #1.
Methanex Corporation MEOH, scheduled to release earnings on Nov. 6, has an Earnings ESP of +53.67% and carries a Zacks Rank #3.
The consensus estimate for MEOH’s earnings for the third quarter is currently pegged at 44 cents.
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