Chemical Stocks Earnings Slated on Nov 5: FMC, CBT, IFF & VVV
A few chemical companies are lined up to report quarterly numbers on Nov 5. The chemical industry is grouped under the broader Basic Materials sector, which is among the Zacks sectors that are expected to record the strongest results in Q3. Earnings for the sector are projected to surge 37.7%, while revenues are expected to rise 16.3%, per the latest Earnings Outlook.
The chemical industry continues its good run in 2018 on sustained demand strength across major end-use markets such as construction and automotive. Improving fundamentals in the energy space, driven by an upswing in crude oil prices also bode well for the industry.
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. Nevertheless, 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 support margin. Synergies from acquisitions should also boost earnings. Moreover, President Trump’s business-friendly tax reform is a positive for U.S. chemical stocks.
We take a look at four chemical companies that are slated to report their results on Nov 5.
FMC Corporation FMC will report Q3 numbers after the closing bell. The company has an Earnings ESP of -1.64% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 90 cents and 92 cents, respectively. The stock carries a favorable Zacks Rank #3 (Hold) but its negative Earnings ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
FMC Corp has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 8.7%.
In August, the company announced that it expects adjusted earnings for Q3 in the range of 87-97 cents per share.
The Zacks Consensus Estimate for revenues for FMC Corp for Q3 is pegged at $1,010 million, reflecting an estimated year-over-year growth of 56.2%.
Contributions from the acquisition of DuPont's Crop Protection assets are expected to drive revenues in the company’s Agricultural Solutions unit in the to-be-reported quarter. Higher volumes and prices are also likely to drive results in the Lithium business. (Read more: FMC Corp to Post Q3: Will the Earnings Streak Continue?)
FMC Corporation Price and EPS Surprise
FMC Corporation Price and EPS Surprise | FMC Corporation Quote
Cabot Corporation CBT will report fiscal Q4 results after the closing bell. The company has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.09. The stock carries a Zacks Rank #4 (Sell), which we caution against going into the earnings announcement.
The company delivered better-than-expected results in three of the trailing four trailing quarters, recording a positive average earnings surprise of 6%.
The Zacks Consensus Estimate for revenues for fiscal Q4 is pegged at $846 million, reflecting an expected increase of 17% from the year-ago quarter.
Cabot anticipates its Reinforcement Materials segment to continue performing in fiscal Q4 on the back of solid operational and commercial execution. For the Performance Chemicals segment, the company expects to maintain margins while driving volume growth in specialty Carbons and Formulations.
The Reinforcement Materials segment is benefiting from strong commercial execution that is driving volumes and margin growth. The Performance Chemicals unit is also gaining from favorable impact from price increase actions. Cabot is taking appropriate pricing actions to offset feedstock cost inflation. The company also remains committed to drive product mix in Performance Chemicals through new product launches and applications.
Cabot Corporation Price and EPS Surprise
Cabot Corporation Price and EPS Surprise | Cabot Corporation Quote
International Flavors & Fragrances Inc. IFF will report Q3 numbers after the closing bell. The company has an Earnings ESP of -1.79%, as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.51 and $1.54, respectively. The stock carries a Zacks Rank #3 but its negative Earnings ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The company has delivered better-than-expected results in the trailing four quarters, recording a positive average earnings surprise of 5.3%.
The Zacks Consensus Estimate for total revenues for Q3 is pegged at $891 million, indicating year-over-year growth of 2%.
In Q3, the company is likely to benefit from favorable markets and acquired businesses. Moreover, the company's exhaustive research and development wing focuses on the development of new and innovative compounds will prove beneficial in the to-be-reported quarter. (Read more: International Flavors Q3 Earnings: What's in the Cards?)
Internationa Flavors & Fragrances, Inc. Price and EPS Surprise
Internationa Flavors & Fragrances, Inc. Price and EPS Surprise | Internationa Flavors & Fragrances, Inc. Quote
Valvoline, Inc. VVV will report fiscal Q4 results after the closing bell. The company has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 34 cents. The stock carries a Zacks Rank #3, which coupled with a 0.00% ESP, makes surprise prediction difficult.
Valvoline lagged the Zacks Consensus Estimate in two of the trailing four quarters, delivering average miss of 2.9%.
The company’s total revenues for fiscal Q4 are projected to rise 8.2% year over year, as the Zacks Consensus Estimate is currently pegged at $592 million.
During fiscal Q3 earnings call, the company announced that it expects continued same-store sales growth in Q4. It expects persistent strong Valvoline Instant Oil Change performance within Quick Lubes. As a result, it raised same-store sales guidance for fiscal 2018 to the top end of its prior range and now expects growth to be between 7% and 7.5%.
Valvoline also raised outlook for new franchise store additions to the high end of its previous guidance. Further, the company now expects to add 30-35 new stores. Moreover, adjusted EBITDA for fiscal 2018 are forecast to be in the range of $465 to $470 million and EPS is expected to be between $1.26 and $1.31 per share.
Addition of new stores, price hike actions and acquisitions are likely to support Valvoline’s results amid escalating raw material cost inflation, which is impacting margins.
Valvoline Inc. Price and EPS Surprise
Valvoline Inc. Price and EPS Surprise | Valvoline Inc. Quote
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cabot Corporation (CBT) : Free Stock Analysis Report
FMC Corporation (FMC) : Free Stock Analysis Report
Valvoline Inc. (VVV) : Free Stock Analysis Report
Internationa Flavors & Fragrances, Inc. (IFF) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research