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What Do Analysts Expect for Celanese’s 2Q16 Net Profit Margins?

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Dec. 4 2020, Updated 3:53 p.m. ET

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%.

Analysts estimate the 2Q16 net profit margins for Celanese’s peers W.R. Grace (GRA), Westlake Chemical (WLK), and LyondellBasell Industries (LYB) to be 11.9%, 12.3%, and 14.5%, respectively.

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.

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Celanese’s EPS

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.

Driving factors

  • 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.

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