Celanese Corporation’s (CE) Ticona engineering polymers business announced an increase in prices of Celanex PBT, Vandar PBT, Impet PET and Riteflex TPC-ET polyesters in the Americas and Europe, effective July 29.
For the Americas, Ticona engineering indicated a price increase of $0.15 per pound, while for Europe it indicated an increase of €0.25 per kilogram.
Effective August 1, 2011, Celanese’s subsidiary Celanese EVA Performance Polymers Inc., is also increasing the price of all grades of Ateva EVA by $0.08 per pound and all grades of LDPE by $0.06 per pound.
Last month, Celanese reported adjusted earnings of 96 cents per share for the first quarter of 2011, beating the Zacks Consensus Estimate of 83 cents. Diluted earnings per share in the quarter were 87 cents, versus 6 cents in the prior-year quarter.
Quarterly revenues grew 14% year over year to $1.6 billion, primarily due to higher volumes across all business segments as well as improved volumes. Results outpaced the Zacks Consensus Estimate of $1.5 billion.
Celanese is one of the world’s largest producers of acetyl products, as well as a leading global producer of high-performance engineered polymers. The company’s earnings outlook has been improving due to strong performance in the Advanced Engineered Materials business.
The company is operating its facilities in the Acetyl Intermediates segment at above the industry utilization rate of 80% providing cost advantages. Capacity utilization has also improved in the Industrial Specialties segment driven by the rising demand in the Asia Pacific.
However, Celanese is exposed to volatile raw material (natural gas, ethylene and methanol) prices used in the production of basic chemicals in the Acetyl Intermediates segment, principally formaldehyde, acetic acid and vinyl acetate monomer.
The company also faces stiff competition from larger peers, E.I. DuPont de Nemours and Co. (DD) and The Dow Chemical Co. (DOW) in the Advanced Engineered Material Segment as well as in the Industrial Specialties segment. Celanese’s balance sheet leverage is also relatively high, which limits its financial flexibility.
Currently, Celanese has a short-term (1 to 3 months) Zacks #2 Rank (Buy) and a long-term (6 months and higher) Neutral recommendation.
