JMPLY Johnson Matthey Public Ltd Company (PK)

Chemical and advanced materials maker Celanese Corporation (CE) declared that it will raise prices for vinyl acetate-based emulsions in Asia. Prices of Polyvinyl acetate (PVAc) homopolymer and vinyl acetate ethylene (VAE) emulsions will rise by 300 RMB/MT in China and $45 USD/MT in the rest of Asia. The price increase will be effective Jan 13, 2014, or as per the contracts.

Last month, Celanese also announced that that it will raise prices for all Hostaform and Celcon polyacetal (POM) product line grades by 5%. The price increase has been put into effect from Jan 1, 2014, or as per the contracts.

Celanese released its third-quarter 2013 results on Oct 18. The company’s adjusted earnings (excluding one-time items) of $1.20 per share beat the Zacks Consensus Estimate of $1.15. Earnings (as reported) from continuing operations came in at $1.07 per share in the quarter, up roughly 34% from 80 cents recorded a year ago.
 
Sales in the quarter were $1,636 million, up 1.7% year over year, lagging the Zacks Consensus Estimate of $1,643 million.

Celanese expects earnings growth on the back of company-specific initiatives, to be consistent with its long-term growth plan. These initiatives, including innovation of new products and enhancement of efficiencies through productivity, are expected to drive earnings in 2014.

Celanese plans to cut costs and run its plants more efficiently to counter weak demand. Moreover, it is aggressively expanding capacity in the emerging Asian markets. The company’s strong presence in these markets should enable it to deliver incremental earnings this year and next.

However, Celanese is witnessing weak demand and pricing in its core acetyl business. Moreover, it is exposed to volatility in raw material costs and has a highly leveraged balance sheet.

Celanese currently has a Zacks Rank #3 (Hold).

Other companies in the chemical industry worth considering are Johnson Matthey plc (JMPLY), LyondellBasell Industries NV (LYB) and PPG Industries Inc. (PPG). While Johnson Matthey holds a Zacks Rank #1 (Strong Buy), both LyondellBasell and PPG Industries retain a Zacks Rank #2 (Buy).

 
CELANESE CP-A (CE): Free Stock Analysis Report
 
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LYONDELLBASEL-A (LYB): Free Stock Analysis Report
 
PPG INDS INC (PPG): Free Stock Analysis Report
 
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