Celanese’s net profit margins
Analysts expect Celanese’s (CE) net profit margin to be ~16% for 2Q16. This compares to 16.6% in 2Q15 and 18.7% in 1Q16. This implies a fall of 3.6% on a year-over-year basis. On a sequential basis, it implies a fall of 14.4%.
Since 1Q15, Celanese has maintained a good net profit margin that has exceeded 13%, with the exception of 4Q15’s net profit margin of -4.6%.
In comparison, analysts expect Celanese’s net profit margin to be higher than its peers, as Celanese’s EBITDA[1. earnings before interest, taxes, depreciation, and amortization] is higher than its peers.
Wall Street analysts expect Celanese (CE) to report adjusted earnings per share (or EPS) of $1.54 for 2Q16, implying growth of -2.3% on a year-over-year basis. On a sequential basis, it implies a fall of 15.8%.
The decline in the company’s EPS is primarily attributed to the POM (polyoxymethylene) facility outage. This requires regulatory testing in Germany, which would impose a significant cost on Celanese.
However, Celanese has been outperforming analysts’ estimates since 1Q15. In 1Q16, analysts expected EPS of $1.49. However, Celanese’s reported earnings per share of $1.83, beating the analysts’ expectations by 22.8%. For fiscal 2016, Celanese’s management issued guidance for growth of 8%–10% in its earnings per share.
- In 2Q16, Celanese increased its list and off-list selling prices for several products in Asia and Europe. The price increase can be seen in its polymers and acetyl products.
- Celanese has moderate growth expectations in Europe and North America.
On July 12, the iShares Russell 1000 Value ETF (IWD) held 0.1% of its total portfolio in Celanese.
In the next part of this series, we’ll look at Celanese’s cash flows.