Celanese Corporation CE is raising the list and off-list selling prices of acetyl intermediates products. The price hike is applicable for bulk shipment orders and will be effective as of Jan 1, 2020, or as contracts permit.
Prices of acetic acid will likely increase by RMB 2800/MT in China and it will rise by $450/MT in Asia outside China.
In the third quarter, the company witnessed a decline in net sales of the Acetyl Chain segment on a year-over-year basis due to lower pricing for most products mainly resulting from lower Asia demand and an overall deflationary environment for raw materials.
In October, Celanese lowered its adjusted earnings per share guidance for 2019 on expectations of weak market conditions. The company anticipates adjusted earnings of $9.60-$9.80 per share for the year compared with $10.50 mentioned earlier. It expects demand weakness to continue throughout 2019. The revised earnings guidance also incorporates the fourth-quarter impact of earlier announced unplanned outage at the company’s Clear Lake facility in Texas.
Nevertheless, Celanese’s measures, including price increase initiatives, cost savings through productivity actions and efficiency engagement, are expected to support its 2019 earnings. Notably, Celanese plans to remain focused on executing productivity programs, enhancing the business model and investing in high-return projects, which it anticipates to deliver double-digit growth in adjusted earnings per share in 2020.
The company’s shares have gained 46% in the past year compared with the industry’s 26.7% growth.
The company expects 2020 adjusted earnings of $11-$12 per share. It expects to achieve the same in the top end of the range if demand condition improves next year.
Celanese Corporation Price and Consensus
Zacks Rank & Stocks to Consider
Celanese currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are General Moly, Inc GMO, Franco-Nevada Corporation FNV and Sandstorm Gold Ltd SAND, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
General Moly has an expected earnings growth rate of 12.5% for the current fiscal year. The company’s shares have gained 7.2% in the past year.
Franco-Nevada has a projected earnings growth rate of 45.3% for 2019. The company’s shares have rallied 36.5% in a year.
Sandstorm Gold has an estimated earnings growth rate of 166.7% for the current year. Its shares have moved up 45.9% in the past year.
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