Celanese earnings decline on weak acetyls demand

00:55 AM | July 18, 2013 | Robert Westervelt

Celanese posted second-quarter net earnings of $133 million, down 40% from the year-ago quarter. Reported adjusted earnings were $1.12/share, a 28% decline year-on-year (YOY), and 3% below consensus estimates as reported by Thomson Reuters. Net sales were $1.65 billion, down 1.3% YOY. Celanese says volumes and pricing both fell 1% YOY.

“Coming into the quarter, we did not anticipate any favorable tailwinds from the global economy. That certainly turned out to be the case for most businesses,” says Celanese chairman and CEO Mark Rohr. “We have actually seen growth rates slow in several economies in the past 90 days as Europe continues to be in contraction and China experiences increasing growth and liquidity challenges in a slowing environment.”

Margins in acetyls intermediates, the company's largest segment, were hurt by low levels of demand in Asia and Europe. Acetyls sales for the quarter fell 1% YOY, to $809 million, and segment operating margin was 8.2%, down from 9.9% in the year-ago quarter.

Rohr says the company expects full-year 2013 adjusted earnings growth of “approximately 12%,” down from previous forecasts of 12-14% growth. “Further deterioration of global demand would pressure this objective," Rohr says. Earnings growth of 12% would translate to earnings of $4.55/share, slightly above current consensus estimates, as reported by Thomson Reuters, of $4.54/share.