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Celanese (CE) Closes Offering of Senior Unsecured Notes

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Celanese (CE) Closes Offering of Senior Unsecured Notes

Celanese (CE) to use the proceeds from the notes offering to refinance an existing term loan maturing in 2021.

Celanese Corporation’s CE subsidiary, Celanese US Holdings LLC, recently closed the registered offering of €500 million of 2.125% senior notes due 2027.

Proceeds from the notes were mainly used to refinance an existing term loan maturing in 2021. Moreover, the notes are guaranteed on a senior unsecured basis by the company and some of its domestic subsidiaries. Per the company, the move extends debt maturity profile and reduces interest expense at the same time.

Celanese continues to boost earnings and cash flow along with improving balance sheet strength. It ended the third quarter with cash and cash equivalents of $703 million, which surged 52.4% year over year. Celanese also generated operating cash flow of $467 million and free cash flow of $382 million in the quarter. The company expects to deliver free cash flow of nearly $1.2 billion in 2018.  

Celanese’s shares have lost 12.6% in the past three months compared with the industry’s decline of 1.7%.

 



The company’s earnings surged around 79% year over to $3.00 per share in the third quarter of 2018. Adjusted earnings of $2.96 surpassed the Zacks Consensus Estimate of $2.75.

Revenues rose roughly 13% year over year to $1,771 million but lagged the Zacks Consensus Estimate of $1,817 million. The company benefited from gains in the Engineered Materials (“EM”) and Acetyl Chain units. Higher pricing across these businesses also supported the results.

Celanese raised its adjusted earnings per share guidance for 2018 to the range of $10.90-$11.10, factoring in strength in the EM and Acetyl Chain units. The company expects the momentum in Acetyl Chain and EM to continue in the rest of 2018. The EM segment is expected to sustain the pace of earnings growth with traction from new projects and bolt-on acquisitions.  

Celanese Corporation Price and Consensus

 

Celanese Corporation Price and Consensus | Celanese Corporation Quote

 

Zacks Rank & Other Stocks to Consider

Celanese currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the basic materials space are CF Industries Holdings, Inc. CF, Methanex Corporation MEOH and The Mosaic Company MOS, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained 44.4% in the past year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 25.7% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 7%. The company’s shares have rallied 57.9% in the past year.

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