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Celanese adjusted earnings up 44% on margin expansion
5:04 PM MDT | April 18, 2013 | Clay Boswell
Celanese posted first-quarter net income of $142 million, a decline of 26% due mainly to a significant favorable tax benefit in the year-ago quarter. Excluding charges, Celanese says that adjusted Ebit and earnings were significantly higher. Reported adjusted earnings were $1.14/share, up 44% from the year-ago period and well above the consensus estimate of 78 cts. Adjusted Ebit for the quarter totaled $269 million. Sales of $1.6 billion reflected a year-on-year (YOY) decrease of 1.7%.
"Celanese delivered a strong quarter,” says chairman and CEO Mark Rohr. “We expanded adjusted Ebit margins both sequentially and year-over-year by more than 400 basis points as we continued to deliver value added solutions to our customers and began to see the impact of the Celanese-specific actions we are implementing.”
The advanced engineered materials segment delivered record first-quarter revenues of $329 million, up 4% YOY despite a 9% decline in European auto builds, says the company. Adjusted Ebit rose 11% YOY to $78 million.
Adjusted Ebit for the consumer specialties segments increased 86% to $108 million on sales of $295 million, up 12%. An annual cash dividend from the segment’s China acetate ventures contributed $24 million of the increase in adjusted EBIT, says Celanese, while continued strong demand in acetate and lower energy costs related to the closed Spondon acetate facility added another $26 million.
Adjusted Ebit for industrial specialties fell 27% to $16 million. Sales of $288 million reflected a 7% YOY decline. Celanese attributes the result to a 4% decrease in pricing on lower demand for photovoltaic applications in ethylene vinyl acetate as well as lower raw material costs, mainly ethylene, in emulsions.
The acetyl intermediate segment increased adjusted EBIT by 22% to $79 million despite a 5% decline in sales to $808 million.
"We continue to expect adjusted earnings per share growth for 2013 will be consistent with our long-term growth objectives of 12-14%, despite the higher 2012 earnings base after our pension accounting policy change and the challenging global economic environment that we anticipate to continue throughout 2013,” Rohr says.