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Celanese (CE) to Report Q1 Earnings: What's in the Offing?

Celanese Corporation CE is set to release first-quarter 2023 results after the bell on May 9.

The company surpassed Zacks Consensus Estimate for earnings in two of the last four quarters while missed it twice. It has a trailing four-quarter earnings surprise of around 6% on average. It posted a negative earnings surprise of 7.7% in the last reported quarter.

Celanese is expected to have faced headwinds from higher raw material, energy and supply chain costs and consumer destocking in the first quarter.  However, the company is likely to have gained from pricing and productivity actions.

Celanese’s shares have lost 32.1% over a year, compared with its industry’s 2.6% decline.

 

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

What do the Estimates Say?

The company expects adjusted earnings per share for the first quarter to be between $1.50 and $1.75.

The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,720 million, which suggests a rise of 7.2% from the year-ago reported number.

The Zacks Consensus Estimate for net sales of CE’s Engineered Materials segment for the first quarter is pegged at $1,444 million, implying a rise of 16.7% on a sequential basis. The consensus mark for the Acetyl Chain segment is $1,302 million, up 14.7% on a sequential basis.

Some Factors at Play

Celanese is likely to have gained from its productivity actions, investments in high-return organic projects and strategic acquisitions in the quarter to be reported.

The company remains focused on executing its productivity programs that include the implementation of a number of cost reduction capital projects. Productivity and price-increase actions are expected to have supported its margins in the March quarter.

Celanese also continues to actively pursue acquisitions, which are providing opportunities for additional growth, investment and synergies. Benefits of acquisitions are also expected to get reflected in its first-quarter performance.

However, Celanese is likely to have faced headwinds from raw material cost inflation due to supply constraints in the March quarter. It is witnessing inflation across many key raw materials as well as supply chain costs. Tight availability is keeping raw material costs elevated. The impacts of higher input, energy and logistics costs are expected to reflect on its first-quarter results.

The company also witnessed significant destocking in automotive in the fourth quarter of 2022 in the Western Hemisphere. The destocking in automotive in this region is likely to have continued in the first quarter. The destocking in the Americas in paints and coatings and construction applications is also expected to have impacted the company’s Acetyl Chain segment in the quarter to be reported.

 

Celanese Corporation Price and EPS Surprise

 

Celanese Corporation Price and EPS Surprise
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 0.00%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at $1.66. 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 That Warrant a Look

Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:

Air Products and Chemicals, Inc. APD, slated to release earnings on May 9, has an Earnings ESP of +2.25%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Air Products’ earnings for the fiscal second quarter is currently pegged at $2.64. APD currently carries a Zacks Rank #3.

Pan American Silver Corp. PAAS, scheduled to release earnings on May 10, has an Earnings ESP of +6.37% and currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for Pan American Silver’s first-quarter earnings has been revised 133.3% upward in the past 60 days. The consensus estimate for PAAS’ earnings for the first quarter is currently pegged at 5 cents.

Compass Minerals International, Inc. CMP, slated to release earnings on May 9, has an Earnings ESP of +16.98%.

The Zacks Consensus Estimate for Compass Minerals’ earnings for the fiscal second quarter is pegged at 53 cents. CMP currently carries a Zacks Rank #3.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report

Celanese Corporation (CE) : Free Stock Analysis Report

Compass Minerals International, Inc. (CMP) : Free Stock Analysis Report

Pan American Silver Corp. (PAAS) : Free Stock Analysis Report

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