Celanese Corporation (CE) Earnings Report: Increased Quarter-Over-Quarter Operating Profit

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Celanese Corporation (CE) moved higher after reporting earnings recently. Despite weaker demand in China, which had been on the decline prior to the COVID-19 onset, the company was able to increase operating profit and EBIT, quarter-over-quarter.

CE reported adjusted earnings per share of $2.29 on net sales of $1.5 billion. The Engineered Materials and Acetyl Chain businesses reportedly held up well, while demand declined due to the impact of the virus. 

CE noted it was able to keep all of its Engineered Materials projects on course, and the pipeline moving, even as travel and stay at home restrictions were put in place. These included important projects in electric vehicles, 5G, infrastructure, and mobile devices. 

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Celanese CEO, Lori Reyerkerk, commenting on the company’s performance, stated, “I am proud of the strong spirit of our employees across the world whose resolve and determination enabled us to deliver a healthy first quarter performance in these unprecedented times.”

The company was able to move forward on a number of initiatives during the quarter, including a sustainability initiative that lets the company address the Environmental, Social, and Governance (ESG) framework.

Celanese was also able to capitalize on a focused approach to assisting customers active in the medical field. The company has stood up a healthcare portal, allowing current and potential customers a one-stop-shop for Celanese health products. 

In the healthcare area, Celanese saw an uptick in demand for Laprene elastomers to produce reusable personal protective equipment face masks, EVA for respirator tubing, and Clarifoil for anti-fog protection in face shields.

Looking forward, Reyerkerk stated, “We expect that reduced consumer activity, which started in the latter half of the first quarter, particularly in the Western Hemisphere, will work its way through relevant value chains to impact our second quarter demand more meaningfully.”

Related: CE Reports Resilient Cash Generation and Strong Balance Sheet

Reyerkerk said the company anticipates it will generate $300 to $400 million of incremental cash in 2020, due to a focus on “productivity, working capital management, and capital expenditures prioritization.” But, they did withdraw EPS guidance for 2020, citing the uncertainty of the COVID-19 impact. 

Celanese stock has recovered almost 40% of the losses it suffered at the recent market low in March. It currently has a dividend yield of 2.87%, paying out $2.48 annually. 

Steven Adams’s personal position in CE: none.


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