Chemical Stock Earnings Slated On Nov 1: DWDP, CC, PAH & ICL
Zacks Investment Research | Oct 31, 2018 08:50AM ET
A few chemical companies are scheduled to report their quarterly numbers on Nov 1.
The chemical industry is gaining from sustained demand strength across major end-use markets such as construction and automotive. Improving fundamentals in the energy space — another key market for chemicals — have also acted as significant tailwinds to the industry. The recovery is being driven by a rebound in crude oil prices from their historic lows.
However, companies in the chemical space face headwinds from a spike in costs of raw materials as a result of short supply partly due to production outages and plant shutdowns. Trade tensions between the United States and China also pose as headwinds to the chemical industry.
However, strategic measures including productivity improvement, pricing hike actions and portfolio restructuring are likely to drive the performance of chemical makers in Q3. Cost-cutting measures by these companies are likely to improve industry-wide margin. Synergies from acquisitions will also boost earnings. Moreover, President Donald Trump’s business-friendly tax reform is a positive for U.S. chemical stocks.
Per the Zacks Industry classification, the chemical industry is grouped under the broader What's in the Offing for Chemours in Q3 Earnings? )
Platform Specialty Products Corporation (NYSE:PAH) will report results ahead of the bell. The company has an Earnings ESP of -4.55%. The Zacks Consensus Estimate is pegged at 4 cents. It has a Zacks Rank #4 (Sell), which we caution against going into the earnings announcement.
The company posted better-than-expected results in two of the last four quarters, missed once and delivered in-line results on the other occasion. The average earnings surprise was a positive 3.3%.
The Zacks Consensus Estimate for revenues for the to-be-reported quarter stands at $502 million, reflecting a decline of 44.5% from the year-ago quarter.
While the company faces challenges from raw material price inflation and some currency headwind, it is likely to gain from pricing initiatives, focus on margin improvements and favorable demand conditions across the end markets in the to-be-reported quarter.
Israel Chemicals Ltd. (NYSE:ICL) will report results before of the opening bell. It has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 9 cents. The stock carries a Zacks Rank #3, but its ESP makes surprise prediction difficult.
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The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of around 19.2%.
The company is likely to gain from higher prices, favorable market conditions, cost management actions and implementation of a value-oriented sales approach across its bromine and phosphate value chains.
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