Celanese (CE) Up 8.4% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Celanese's recent earnings report shows mixed results, with a notable decline in adjusted earnings and revenues, while the stock has outperformed the S&P 500 in the past month [1][3][4]. Financial Performance - Celanese reported Q2 2025 earnings from continuing operations of $1.90 per share, up from $1.42 in the prior-year quarter, but adjusted earnings fell 39.5% to $1.44 per share from $2.38 a year ago [3]. - Revenues for the quarter were approximately $2.53 billion, a decrease of about 4.5% year over year, but exceeded the Zacks Consensus Estimate of $2.50 billion [4]. - The Engineered Materials unit generated net sales of around $1.44 billion, down 1.7% year over year, while the Acetyl Chain segment posted net sales of approximately $1.12 billion, down 7.2% year over year [5][6]. - Cash and cash equivalents at the end of the quarter were roughly $1.17 billion, up 23.3% sequentially, while long-term debt increased by 2.5% to approximately $12.69 billion [7]. Outlook - The company anticipates a softer demand environment for the second half of the year, which may offset the benefits of cost reduction initiatives [8]. - Adjusted earnings per share for Q3 are projected to be in the range of $1.10 to $1.40, with expectations to generate $700 million to $800 million in free cash flow for 2025 [8]. - There has been a downward trend in estimates, with a consensus estimate shift of -27.14% in the past month [9][12]. Industry Context - Celanese operates within the Zacks Chemical - Specialty industry, where PPG Industries, a peer, reported revenues of $4.2 billion for the last quarter, reflecting a year-over-year decline of 12.5% [13]. - PPG Industries is expected to post earnings of $2.12 per share for the current quarter, indicating a slight year-over-year change of -0.5% [14].