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Why Celanese's Shares Popped

By Travis Hoium - Apr 19, 2013 at 4:47PM

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Is this meaningful or just another movement?

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 (CE 0.70%) 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.

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Stocks Mentioned

Celanese Corporation Stock Quote
Celanese Corporation
CE
$151.79 (0.70%) $1.06

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