CHICAGO, May 13, 2011 /PRNewswire/ -- Today, Zacks Equity
Research discusses the Chemical Industry, including The Dow
Chemical Company (NYSE: DOW), EI DuPont de Nemours
& Co (NYSE: DD), Eastman Chemical
Company (NYSE: EMN) and Celanese
Corp. (NYSE: CE).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
A synopsis of today's Industry Outlook is presented below. The
full article can be read at
http://www.zacks.com/stock/news/53215/Chemical+Industry+Outlook+%96+May+2011
The recession had hit the chemical industry hard. As a result of
lack of demand, chemical companies shelved their growth plans. With
plants idled or running at historically low rates, the companies
looked for avenues to streamline operations and increase
productivity. Accordingly, they resorted to restructurings, plant
closures and layoffs. Cost-cutting initiatives at industry majors,
like, The Dow Chemical Company (NYSE: DOW)
and EI DuPont de Nemours & Co (NYSE: DD)
helped them save billions of dollars.
With the economic turnaround, the global chemical industry is
recovering from the recession-hit lows. Domestically, chemical
production volumes increased across all regions of the country in
2010, reversing the steep declines experienced in 2008 and 2009.
The largest gains occurred in the Gulf Coast and Ohio Valley
regions, boosted by export demand for basic chemicals and plastics.
Output is expected to grow moderately in all regions in 2011 and
continue to improve through 2012.
The growth outlook for the U.S. economy remains favorable,
despite the anemic pace in the first quarter. Current expectations
are for a real GDP growth rate in excess of 3% for 2011.
End-markets for chemical products are showing strong growth.
This growth has been reflected in the earnings releases of most
chemical companies for first quarter 2011. Eastman Chemical
Company (NYSE: EMN), for example, reported a 28%
increase in sales revenues, primarily due to improved customer
demand in packaging, transportation and other markets and the
positive impact of growth initiatives.
Combined with the restructuring and cost saving programs that
many chemical companies implemented last year, output growth is
driving high earnings across the sector, to the extent that many
companies are confident of out-performing full year forecasts.
Based on the strong first quarter results, Eastman Chemical
Company expects second quarter 2011 earnings per share to be
slightly higher than first quarter 2011 and full year 2011 earnings
per share to be slightly higher than $9.
Celanese Corp. (NYSE: CE) revenue also grew 14% year
over year to $1.6 billion in first
quarter 2011 driven by higher volumes across all business segments.
Encouraged by the first quarter strength, the company raised its
outlook for full-year 2011.
The company now expects 2011 operating EBITDA to be at least
$200 million higher than 2010's
$1,122 million and adjusted earnings
per share to be at least $0.85 higher
than 2010's $3.37, based on a tax
rate and diluted share count of 17% and 158.7 million shares,
respectively.
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