Celanese Q2 Earnings and Sales Fall Short of Estimates

Celanese Corporation CE reported second-quarter 2024 earnings from continuing operations of $1.42 per share, which declined from $2 in the prior-year quarter.

Adjusted earnings were $2.38 per share, up 9.7% from $2.17 reported a year ago. The bottom line lagged the Zacks Consensus Estimate of $2.80.

Revenues of $2,651 million decreased roughly 5.1% year over year. It missed the Zacks Consensus Estimate of $2,725.7 million. The decline in net sales is a result of a decrease in pricing.

Segment Highlights

Net sales in the Engineered Materials unit were $1,467 million in the reported quarter, down around 7.4% year over year. It missed our estimate of $1,648.4 million. The segment reported an operating profit of $138 million and an adjusted EBIT of $265 million in the second quarter.

The Acetyl Chain segment posted net sales of $1,202 million, down roughly 2.5% year over year. It beat our estimate of $1,125.1 million. The segment generated an operating profit of $242 million and an adjusted EBIT of $277 million in the second quarter.

Financials

Celanese ended the quarter with cash and cash equivalents of $1,185 million, down roughly 8.5% sequentially. Long-term debt was stable sequentially at $11,058 million.

Cash provided by operating activities was $292 million and free cash flow was $173 million in the reported quarter. Capital expenditures were $105 million.

Outlook

Celanese expects adjusted earnings in the range of $2.75-$3 per share for the third quarter of 2024. Furthermore, based on the impact of the second-quarter force majeure and ongoing demand issues, CE forecasts full-year adjusted earnings per share in the range of $10.25 to $10.75.

Price Performance

Celanese's shares have gained 10.6% in the past year against a 11.4% decline of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

CE currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth a look in the basic materials space include Barrick Gold Corporation GOLD, Hecla Mining Company and SilverCrest Metals Inc. SILV.

Barrick is slated to report second-quarter results on Aug 12, before market open. The Zacks Consensus Estimate for GOLD's earnings is pegged at 26 cents. GOLD beat the consensus in each of the last four quarters, with the average earnings surprise being 18.3%. GOLD currently carries a Zacks Rank #2 (Buy).

Hecla, carrying a Zacks Rank #1, is slated to report second-quarter results on Aug 6. The Zacks Consensus Estimate for Hecla's second-quarter earnings is pegged at a penny per share. The stock has gained nearly 0.8% in the past year.

SilverCrest will report results for the second quarter on Aug 7. The Zacks Consensus Estimate for SilverCrest's earnings is pegged at 17 cents. SILV, a Zacks Rank #2 stock, beat the consensus in each of the last four quarters, with the average earnings surprise being 42.4%. The stock has surged nearly 107% in the past year. 

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