CE - Celanese - production and sale of industrial chemicals primarily in North America, Europe, and Asia

Celanese Corp. (CE) is a company on the upswing. It just reported solid first quarter results on Apr 24 that included sales growth of 19% from the year before. This translated into adjusted earnings of $1.06 per share, well ahead of analyst expectations. Moving forward, Celanese said it anticipates strong international demand and continued pricing strength, which should help fuel the underlying data to support its share price.

Celanese Corporation engages in the production and sale of industrial chemicals primarily in North America, Europe, and Asia. Net sales totaled $6.4 billion in 2007, with approximately 70% generated outside of North America. The company has a market cap. of $4.73 billion, was founded in 2004 and is headquartered in Dallas, Texas.

First Quarter Results

Celanese reported respectable first quarter results on Apr 24 in which net sales were up 19% from the year prior to $1.846 billion. The company cited its downstream businesses, higher volume and favorable currency exchanges as the primary drivers of growth.

Net earnings decreased to $145 million from $201 million last year, primarily due to a $79 million restructuring gain from the year prior. Adjusted earnings for the period were $1.06 per share compared to 77 cents last year. Also, during the first quarter, Celanese generated $166 millions in cash from operating activities compared to $12 million last year.

Guidance Boosted

After the solid quarterly results, Celanese boosted its guidance. Due to strong demand and a favorable pricing environment, the company now expects full-year earnings of $3.60 to $3.85 per share, compared to $3.40 to $3.70 before.

The analyst community is even more bullish, with the full-year consensus estimate pegged at $3.93 cents, up from $3.90 just seven days ago.

The bar is being raised for Celanese both internally and externally, but the company has shown it knows how to surprise and beat earnings projections. Over the last four quarters Celanese has bested analyst expectation by an average of nine cents, or 12.32%.

Celanese also bears the favor of carrying attractive valuations. Based upon current-year earnings projections, this stock is only trading at a P/E multiple of just over 11X. The company also looks well insulated from any overbearing debt, carrying a 2.99 debt-to-equity multiple.

The Chart

With all the good news on hand, the company's share price has been advancing. SInce bottoming out on Mar 20 just above $34, this stock has recently topped off over $45, an impressive short-term pop of over 32%. In the process, this stock logged a new 52-week and all-time high. Moving forward, the company should produce the earnings to support its stock price. Taka a look at the nice recent up move in the chart below.

Content Courtesy: Zacks Investment Research

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