Key Takeaways DOW is set to report Q2 results on July 24, with the Zacks Consensus Estimate pegged at a loss of 8 cents. Dow's revenues are projected to fall 4.6% year over year, with an expected decline across the segments. Cost-saving actions may aid margins, but weak demand and pricing pressures remain headwinds.Dow Inc. (DOW) is scheduled to come up with second-quarter 2025 results before the opening bell on July 24.DOW surpassed the Zacks Consensus Estimate in two of the trailing four quarters and mi ...

Industry Overview - The Zacks Chemicals Diversified industry includes manufacturers of basic chemicals, plastics, specialty chemicals, and agricultural chemicals, serving various end markets such as automotive, construction, transportation, electronics, aerospace, and agriculture [3] - Basic chemicals produced include petrochemicals, polymers, and inorganic chemicals, while specialty chemicals are used in specific applications based on performance [3] Current Challenges - The industry is facing persistent demand weakness in key markets, particularly in consumer durables and building & construction, due to lower consumer spending driven by inflationary pressures in Europe and a slow recovery in China [1][4] - The U.S. housing market uncertainties and elevated borrowing costs are negatively impacting the building & construction sector, while the consumer electronics market is experiencing a slowdown post-pandemic [4][5] - In China, a sluggish real estate market and slower economic recovery are contributing to reduced chemical demand, compounded by the ongoing economic challenges in Europe due to high inflation and interest rates [5] Strategic Responses - Industry players such as DuPont, Albemarle, and Kronos are implementing strategic measures including cost reductions, productivity improvements, and aggressive price hikes to navigate the challenging environment [2][6] - Companies are focusing on operational efficiency and strengthening their balance sheets to enhance cash flows and sustain margins amid rising costs [6] Market Performance - The Zacks Chemicals Diversified industry has underperformed both the S&P 500 and the broader Zacks Basic Materials sector, with a decline of 25.2% over the past year compared to the S&P 500's increase of 9.1% [9] - The industry currently holds a Zacks Industry Rank of 208, placing it in the bottom 15% of over 250 Zacks industries, indicating bleak near-term prospects [7][8] Valuation Metrics - The industry is trading at a trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) ratio of 17.47X, which is below the S&P 500's 21.85X but above the sector's 15.61X [12] - Historical trading ranges for the industry have been between 8.76X and 19.29X over the past five years, with a median of 14.53X [12] Company Highlights - **DuPont**: Focused on technology-based materials and solutions, with a projected earnings growth rate of 4.9% for 2025. The company is benefiting from cost synergy savings and productivity improvements [15][16] - **Albemarle**: A premier specialty chemicals company with expected earnings growth of 28.6% for 2025, well-positioned to capitalize on the growing battery-grade lithium market [19][21] - **Kronos Worldwide**: Expected earnings growth of 20% for 2025, benefiting from higher demand for titanium dioxide (TiO2) products and easing pricing pressure [22][24]

Group 1 - Huntsman Corporation has completed a strategic review of its European Maleic Anhydride business, leading to the decision to permanently close its facility in Moers, Germany, by the end of the current quarter [1][2] - The closure is a response to underperformance, with the European Maleic Anhydride operations recording an adjusted EBITDA loss of approximately $10 million in 2024 [2] - Huntsman plans to serve European customers through its North American facilities located in Pensacola, FL, and Geismar, LA [2] Group 2 - The company expects to incur a one-time, non-cash asset impairment charge of around $75 million in the second quarter of 2025 due to the facility closure [2] - Huntsman shares have lost 54% in the past year, significantly underperforming compared to the Zacks Chemicals Diversified industry's 27.8% decline [3] - Order patterns in key markets such as construction and transportation are negatively impacted by low visibility and customer uncertainty regarding demand trends [4] Group 3 - Huntsman is focused on cost actions, including workforce reductions and asset optimization in both Europe and North America, in response to the current market conditions [4] - The company currently carries a Zacks Rank 5 (Strong Sell) [5] - Better-ranked stocks in the basic materials space include Carpenter Technology Corporation, Alamos Gold Inc., and Hawkins, Inc., with Carpenter Technology showing significant performance improvement [5][6][8]

Core Viewpoint - Dow Inc.'s shares have declined by 22% over the past three months due to soft end-market demand and pricing pressures in a challenging macroeconomic environment [1] Group 1: Stock Performance - Dow has underperformed compared to the Zacks Chemicals Diversified industry's decline of 16.6% and the S&P 500's fall of 4.3% in the same period [2] - The stock has been trading below the 200-day simple moving average (SMA) since October 7, 2024, indicating a bearish trend [5][7] Group 2: Demand Challenges - Demand softness in Europe and China is impacting Dow, with lower consumer spending and weak construction and manufacturing activities [9] - The infrastructure end market, including residential construction, remains weak, and inflationary pressures are affecting demand in consumer durables [10] Group 3: Pricing Pressures - Dow's Performance Materials & Coatings unit is facing weak siloxane prices due to supply additions in Asia, which have negatively impacted sales [11] Group 4: Growth and Cost Management - Dow is focused on high-return growth projects and cost actions, expecting to deliver approximately $6 billion in cash support through infrastructure asset sales and cost savings [13] - The company plans to cut costs by $1 billion, including a workforce reduction of around 1,500 roles globally [13] Group 5: Financial Health - Dow has a strong balance sheet with over $11 billion in liquidity and has returned $2.5 billion to shareholders in 2024 [14] - The company offers a healthy dividend yield of 9.1%, which is perceived as safe and reliable despite a high payout ratio of 239% [15] Group 6: Earnings Estimates - The Zacks Consensus Estimate for Dow's 2025 earnings has been revised downward over the past 60 days, indicating declining earnings prospects [16] Group 7: Valuation - Dow is currently trading at a forward P/E of 43X, representing a 138% premium compared to the industry average of 18.07X [17]

Core Viewpoint - Koppers Holdings Inc. reported a loss of $13.9 million or 68 cents per share for Q1 2025, contrasting with a profit of $13 million or 59 cents per share in the same quarter last year. Adjusted earnings were 71 cents per share, up from 62 cents year-over-year and exceeding the Zacks Consensus Estimate of 56 cents [1][2]. Financial Performance - Revenues for Koppers in Q1 2025 were $456.5 million, down approximately 8% year-over-year, missing the Zacks Consensus Estimate of $488 million [2]. - The company ended the quarter with cash and cash equivalents of $33.3 million, a decrease of around 24% from the previous quarter. Long-term debt increased to $975.9 million, up about 5% sequentially [5]. Segment Highlights - The Railroad and Utility Products and Services (RUPS) segment saw sales rise about 4% year-over-year to $235 million, surpassing the consensus estimate of $230 million, driven by increased volumes and price rises [3]. - The Performance Chemicals (PC) segment recorded sales of $120.9 million, down around 20% year-over-year, falling short of the consensus estimate of $139 million due to reduced volumes [4]. - Sales from the Carbon Materials and Chemicals (CMC) division fell approximately 18% year-over-year to $100.6 million, missing the consensus estimate of $119 million, attributed to lower volumes and reduced prices [4]. Outlook - Koppers anticipates sales for 2025 to be in the range of $2 billion to $2.2 billion, slightly lower than the previous expectation of $2.17 billion, considering the competitive landscape and global economic conditions. The company expects adjusted EBITDA to be around $280 million and adjusted earnings per share to be $4.75 for 2025 [6]. - Capital expenditures are projected at $65 million for the year, with operating cash flows expected to be $150 million in 2025 [7]. Stock Performance - Koppers' shares have declined by 31.7% over the past year, compared to a 25.4% decline in the Zacks Chemicals Diversified industry [8].

Core Viewpoint - Innospec Inc. reported a decline in profits and revenues for the first quarter of 2025, with mixed performance across its business segments, particularly impacted by unfavorable market conditions and currency fluctuations [1][2][4]. Financial Performance - Innospec recorded a profit of $32.8 million or $1.31 per share, down from $41.4 million or $1.65 per share in the same quarter last year [1]. - Earnings, excluding one-time items, were $1.42 per share, a decrease from $1.75 per share a year ago, but exceeded the Zacks Consensus Estimate of $1.40 [1]. - Revenues fell approximately 12% year over year to $440.8 million, missing the Zacks Consensus Estimate of $459.3 million [1]. Segment Performance - The Fuel Specialties unit experienced a decline in revenues of about 4% year over year to $170.3 million, below the consensus estimate of $180 million, due to unfavorable price/mix and currency impacts [3]. - The Performance Chemicals unit reported sales of $168.4 million, up around 5% year over year, but still below the consensus estimate of $174 million [2]. - Revenues in the Oilfield Services division plummeted around 37% year over year to $102.1 million, significantly lower than the consensus estimate of $113 million, affected by weak recovery in Latin America and lower activity in U.S. completions and production [4]. Cash Flow and Dividends - Innospec ended the quarter with cash and cash equivalents of $299.8 million, reflecting a sequential increase of about 4% [5]. - Net cash provided by operating activities was $28.3 million, down from $80.6 million in the previous year [5]. - The company increased its semi-annual dividend by 10% and initiated a $50 million share buyback program [5]. Outlook - Innospec anticipates challenges in the Performance Chemicals and Oilfield Services segments due to the current economic environment, while expecting stability in the Fuel Specialties segment [6]. - The company is focused on positioning its businesses for growth and margin improvement as market conditions recover [6]. Stock Performance - Innospec's shares have declined by 31.3% over the past year, compared to a 24.9% decline in the Zacks Chemicals Diversified industry [7].

Core Viewpoint - Huntsman Corporation reported a narrower loss in Q1 2025 compared to the previous year, but revenues fell short of expectations, indicating ongoing challenges in demand and pricing across its segments [1][5][6]. Financial Performance - The reported loss was 3 cents per share, an improvement from a loss of 22 cents per share in the same quarter last year [1]. - Adjusted loss per share was 11 cents, compared to a loss of 6 cents in the prior year, aligning with Zacks Consensus Estimate [1]. - Revenues totaled $1,410 million, down approximately 4% year over year, missing the Zacks Consensus Estimate of $1,479.2 million [1]. Segment Highlights - **Polyurethanes**: Revenues decreased by 2% to $912 million, missing estimates due to lower average selling prices, although sales volumes improved [2]. - **Performance Products**: Revenues fell 12% to $257 million, below estimates, primarily due to reduced sales volumes from lower customer demand and production outages [3]. - **Advanced Materials**: Revenues decreased by 5% to $249 million, falling short of estimates, driven by lower average selling prices and negative foreign currency impacts [4]. Cash Flow and Expenditures - Free cash flow from continuing operations was a use of $107 million, slightly higher than the $105 million used in the prior-year quarter [5]. - Capital expenditures were $36 million, down from $42 million in the previous year [5]. - As of March 31, 2025, the company had approximately $1.3 billion in combined cash and unused borrowing capacity [5]. Outlook - The company anticipates continued pressure on order patterns in key markets due to low visibility and customer uncertainty regarding demand trends [6]. - Huntsman is focusing on cost actions, including workforce reductions and asset optimization in Europe and North America [6]. - Capital expenditures for 2025 are expected to be between $180 million and $190 million [7]. Stock Performance - Huntsman shares have declined by 53.1% over the past year, compared to a 25.5% decline in the Zacks Chemicals Diversified industry [8]. Zacks Rank - Huntsman currently holds a Zacks Rank of 5 (Strong Sell), indicating a challenging outlook compared to better-ranked stocks in the Basic Materials sector [9].

Albemarle Corporation (ALB) logged adjusted loss (barring one-time items) of 18 cents per share in the first quarter of 2025. This compares to earnings of 26 cents per share a year ago. Loss per share was narrower than the Zacks Consensus Estimate of a loss of 62 cents. Revenues fell roughly 21% year over year to $1,076.9 million in the quarter. The top line missed the Zacks Consensus Estimate of $1,171.4 million. The top line was hurt by lower prices in the Energy Storage segment, partly offset by the volu ...

DuPont de Nemours, Inc. (DD) is scheduled to come up with first-quarter 2025 results, before the opening bell on May 2.The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of roughly 16.1%, on average. DD posted an earnings surprise of roughly 15.3% in the last reported quarter.DuPont is expected to have benefited from its innovation-driven investment, productivity actions and the acquisitions of the Spectrum Plastics ...

Albemarle Corporation (ALB) is slated to release first-quarter 2025 results after the closing bell on April 30.The company missed the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered a negative earnings surprise of 160.2%, on average. It posted a negative earnings surprise of 122.5% in the last reported quarter. ALB is likely to have benefited from its cost and productivity actions in the first quarter amid headwinds from softer lithium market pric ...