Why Celanese's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of chemical maker Celanese (NYSE: CE  ) jumped as much as 16% today after the company released earnings.

So what: Revenue fell slightly in the first quarter, to $1.61 billion, but adjusted earnings per share jumped 44%, to $1.14. Revenue was in line with expectations, and earnings crushed the $0.79 that analysts expected. 

Now what: The earnings momentum looks strong on an adjusted basis, but GAAP earnings per share actually fell from $1.21 a year ago, to $0.89 during the first quarter, due to a higher tax provision. I'd like to see more top-line growth before diving in, but the company is generating strong EBITDA growth, which is a great sign. I'll sit out this move for now but, at 9.2 times forward earnings, the stock is a reasonable risk for more bullish investors.

Interested in more info on Celanese? Add it to your watchlist by clicking here.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

DocumentId: 2374376, ~/Articles/ArticleHandler.aspx, 7/23/2014 2:54:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement