Effective June 15, 2011, specialty material company Celanese Corporation (CE) will increase the price of all emulsions sold in the Americas.
Prices for vinyl acetate homopolymers will be up by 3 cents per pound, vinyl acetate ethylene (VAE) emulsions by 3 cents per pound, vinyl acrylic emulsions by 5 cents per pound and pure acrylic emulsions by 9 cents per pound.
The increase was driven by continued price rise in raw materials, particularly in the propylene/acrylic monomer chain, as well as increased transportation costs, particularly in North America.
With Celanese’s unique technology advantage, which allows it to produce a wide range of high value added EVA products, the company is well positioned to satisfy the needs of new high-growth applications.
China is the fastest growing EVA market in the photovoltaic cell industry and strong demand for EVA in other parts of Asia has led to an increase in global EVA production.
Recently, Celanese reported that its first-quarter 2011 exceeded the Zacks Consensus Estimate. Adjusted earnings were 96 cents per share in the first quarter of 2011, beating the Zacks Consensus Estimate of 83 cents. Diluted earnings per share in the quarter were 87 cents versus 6 cents in the prior-year quarter.
Quarterly revenues grew 14% year over year to $1.6 billion, primarily driven by higher volumes across all business segments as well as improved volumes. Results were above the Zacks Consensus Estimate of $1.5 billion. Operating profit jumped to $188 million from a loss of $14 million in the prior-year quarter. Operating margins came in at a positive 8.5% from a negative 99% last year.
Celanese is one of the world's largest producers of acetyl products, as well as a leading global producer of high-performance engineered polymers. The company's earnings outlook has been improving driven by the strong performance in the Advanced Engineered Materials business.
The company is operating its facilities in the Acetyl Intermediates segment at above the industry utilization rates of 80%, which provides cost advantages. Capacity utilization has also improved in the Industrial Specialties segment due to rising demand in the Asia Pacific.
However, Celanese is exposed to volatile raw material (natural gas, ethylene and methanol) prices used in the production of basic chemicals in the Acetyl Intermediates segment, principally formaldehyde, acetic acid and vinyl acetate monomer.
The company also faces stiff competition from larger peers, E.I. DuPont de Nemours and Co. (DD) and The Dow Chemical Co. (DOW) in the Advanced Engineered Material Segment as well as in the Industrial Specialties segment. Celanese's balance sheet leverage is also relatively high, which limits its financial flexibility.
Currently, Celanese has a short-term (1 to 3 months) Zacks #1 Rank (Strong Buy) and a long-term (6 months and higher) Neutral recommendation.
CELANESE CP-A (CE): Free Stock Analysis Report
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