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Celanese (CE) to Report Q3 Earnings: What's in the Cards?

Celanese Corporation CE is set to release third-quarter 2020 results on Oct 25. Weak demand due to the impacts of the coronavirus outbreak is likely to have impacted its performance in the third quarter. However, the benefits of the company’s productivity actions and strategic acquisitions are likely to get reflected in its third-quarter performance.

The leading chemical and specialty materials maker delivered an earnings surprise of 19.3% in the last reported quarter.  

Celanese’s shares have lost 3.3% in the past year compared with its industry’s 1.5% decline.

Let’s see how things are shaping up for this announcement.

Factors at Play in Q3

Soft demand conditions are likely to have impacted the company’s third-quarter performance across Engineered Materials and Acetyl Chain units. The company is seeing demand weakness across automotive, industrial applications and consumer appliances stemming from the pandemic. Reduced consumer activities, especially in the Western Hemisphere, affected sales volumes in the second quarter. The trend is likely have continued into the third quarter.

In the second quarter, the Engineered Materials segment witnessed lower volumes due to global automotive demand decline along with considerably weaker demand across industrial applications and consumer appliances. While the company is seeing some recovery in demand, softness is likely persisted in the third quarter.  

Nevertheless, Celanese is committed to execute its productivity programs that include implementation of a number of cost reduction capital projects. Its strategic actions including cost savings through productivity initiatives, price increase actions and operational improvement are likely to have contributed to its bottom line in the to-be-reported quarter. Benefits of acquisitions and project commercialization are also expected to get reflected on third-quarter results.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for Celanese for the to-be-reported quarter stands at $1,356 million, suggesting an expected year-over-year decline of 14.5%.

The consensus mark for net sales for the company’s Engineered Materials unit is currently pegged at $519 million for the third quarter, which calls for a 12.2% year-over-year decline.

Moreover, the Zacks Consensus Estimate for the Acetyl Chain segment’s net sales is currently pegged at $743 million, suggesting a 14.3% decline from the year-ago quarter. The same for the Acetate Tow division stands at $131 million, which suggests 17.1% year-over-year drop.

Celanese Corporation Price and EPS Surprise

Celanese Corporation price-eps-surprise | Celanese Corporation Quote

Zacks Model

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 Celanese is -0.15%. This is because the Most Accurate Estimate is currently pegged at $1.68 while the Zacks Consensus Estimate stands at $1.69. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Celanese carries a Zacks Rank #3.

Stocks Likely to Beat Estimates

Here are some companies that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Coeur Mining, Inc. CDE, scheduled to release third-quarter 2020 results on Oct 28, has an Earnings ESP of +60.00% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pan American Silver Corp. PAAS, scheduled to release third-quarter 2020 earnings on Nov 4, has an Earnings ESP of +2.78% and carries a Zacks Rank #3.

Westlake Chemical Corporation WLK, slated to release third-quarter 2020 earnings on Nov 3, has an Earnings ESP of +6.32% and carries a Zacks Rank #3.

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Westlake Chemical Corporation (WLK): Free Stock Analysis Report
Coeur Mining, Inc. (CDE): Free Stock Analysis Report
Celanese Corporation (CE): Free Stock Analysis Report
Pan American Silver Corp. (PAAS): Free Stock Analysis Report
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