Celanese Corporation CE is set to release second-quarter 2020 results after the closing bell on Jul 28. Weak demand due to the impacts of the coronavirus outbreak is likely to have impacted its performance in the quarter. However, the company’s results will likely reflect the benefits of its productivity actions and strategic acquisitions.

The leading chemical and specialty materials maker delivered an earnings surprise of 4.6% in the last reported quarter. Sales missed expectations as the company witnessed demand weakness during the period.

Celanese’s shares have lost 15.1% over a year, compared with its industry’s 34.6% rise.

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for Celanese for the to-be-reported quarter stands at $1,075 million, suggesting an expected year-over-year decline of 32.5%.

The consensus mark for net sales for the company’s Engineered Materials (EM) unit is currently pegged at $377 million for the second quarter, indicating a 36.4% year-over-year decline.

Moreover, the Zacks Consensus Estimate for the Acetyl Chain segment’s net sales is currently pegged at $628 million, reflecting a 27.4% decline from the year-ago quarter. The same for the Acetate Tow division stands at $147 million, reflecting a 10.4% year-over-year drop.

Some Factors at Play

Soft demand conditions are likely to have weighed on second-quarter performance across EM and Acetyl Chain units. The company is seeing demand weakness across certain markets including automotive and electronics due to the coronavirus pandemic. Reduced consumer activities, especially in the Western Hemisphere, are likely to have impacted demand in the second quarter.

Nevertheless, Celanese remains committed to execute its productivity programs that include implementation of a number of cost reduction capital projects. Its strategic actions including cost savings through productivity initiatives, price increase actions and operational improvement are likely to have contributed to its bottom line in the June quarter. Benefits of acquisitions and project commercialization are also expected to get reflected on second-quarter results.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Celanese this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
 
Earnings ESP: Earnings ESP for Celanese is -5.01%. This is because the Most Accurate Estimate is currently pegged at $1.04 while the Zacks Consensus Estimate stands at $1.09. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Celanese carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Kinross Gold Corporation KGC, slated to release earnings on Jul 29, has an Earnings ESP of +5.13% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont Corporation NEM, slated to release earnings on Jul 30, has an Earnings ESP of +10.02% and carries a Zacks Rank #3.

Barrick Gold Corporation GOLD, scheduled to release earnings on Aug 10, has an Earnings ESP of +0.90% and carries a Zacks Rank #3.

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