Celanese Corporation CE reported third-quarter 2024 earnings from continuing operations of $1.08 per share, down from $8.70 in the prior-year quarter. Adjusted earnings in the third quarter were $2.44 per share, down 2.4% from $2.50 reported a year ago. The bottom line missed the Zacks Consensus Estimate of $2.84.

Revenues of $2,648 million decreased roughly 2.7% year over year. Revenues missed the Zacks Consensus Estimate of $2,685 million.

Celanese experienced sustained demand weakness in major end-markets such as paints, coatings and construction, as well as downturns in the Western Hemisphere automobile and industrial sectors during the reported quarter.

Celanese Corporation Price, Consensus and EPS Surprise

Celanese Corporation price-consensus-eps-surprise-chart | Celanese Corporation Quote

CE’s Segment Highlights

Net sales in the Engineered Materials unit were $1,481 million in the quarter, down around 3% year over year. It missed our estimate of $1,609.5 million. The segment reported an operating profit of $102 million and an adjusted EBIT of $237 million for the third quarter.

The Acetyl Chain segment posted net sales of $1,190 million, down nearly 12.7% year over year. It beat our estimate of $1,162.1 million. The segment generated an operating profit of $239 million and an adjusted EBIT of $276 million for the third quarter.

CE’s Financials

Celanese ended the quarter with cash and cash equivalents of $813 million, down roughly 31.4% sequentially. Long-term debt was up around 2.4% sequentially to $11,324 million.

Cash provided by operating activities was $79 million and free cash flow was a negative $16 million in the reported quarter. Capital expenditures were $131 million in the quarter.

CE’s Outlook

Celanese anticipates a deterioration in demand in the fourth quarter due to higher-than-normal seasonal destocking in automotive and industrial markets. The company will considerably reduce output to meet this demand level and generate cash through inventory drawdowns, even though it anticipates that this destocking will only last for the quarter. 

Celanese expects adjusted earnings per share of around $1.25 in the fourth quarter based on these variables. It aims to create long-term shareholder value by improving earnings, reducing costs, expanding free cash flow and deleveraging the company.

CE’s Stock Price Performance

Celanese’s shares have gained 2.9% in the past year against an 2.9% decline of the industry.

Image Source: Zacks Investment Research

CE’s Rank & Key Picks

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

Better-ranked stocks worth a look in the basic materials space include IAMGOLD Corporation IAG, Alamos Gold Inc. AGI and Barrick Gold Corporation GOLD.

IAMGOLD is slated to report third-quarter results on Nov. 7. The Zacks Consensus Estimate for third-quarter earnings is pegged at 11 cents. IAG beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 200%. IAG carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alamos Gold is slated to report third-quarter results on Nov. 6, after market close. The Zacks Consensus Estimate for AGI’s third-quarter earnings is pegged at 22 cents. AGI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 13.4%. AGI currently carries a Zacks Rank #2.

Barrick Gold is slated to report third-quarter results on Nov. 7, before the opening bell. The consensus estimate for Barrick Gold’s third-quarter earnings is pegged at 33 cents. GOLD, carrying a Zacks Rank #2, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 21.2%.