Celanese Earnings Nearly Triple as Pricing Snaps Back
Celanese posted adjusted earnings of $2.45 a share in the second quarter, its highest in nearly three years, as a pricing rebound in its Acetyl Chain business drove a sharp reacceleration from the first quarter.
Celanese (CE) reported adjusted earnings of $2.45 a share for the second quarter, nearly triple the $0.85 a share it posted in the first quarter and up from $1.43 a share a year earlier. The chemicals maker's operating EBITDA margin expanded to 24% from 20% in the first quarter, marking the sharpest sequential improvement in its results in recent memory.
The rebound came after a first quarter in which volume grew but pricing stayed flat across the company's businesses. Net sales of $2.8 billion in the second quarter rose 18% sequentially, split between 4% volume growth and a 14% price increase, a reversal from the first quarter's 6% sequential growth, which came almost entirely from volume with no price contribution.
The swing centered on the Acetyl Chain segment, where net sales rose 28% sequentially to $1.33 billion on 6% volume growth and a 22% price increase. That pricing power lifted the segment's adjusted EBIT margin to 24%, up from about 13% in the first quarter, when sales growth had been modest and pricing was largely absent.
Engineered Materials moved in a different direction. Sales in the segment rose 9% sequentially to $1.45 billion, with volume up 3% and price up 6%, an acceleration from the first quarter's 6% sequential growth. But the segment's adjusted EBIT margin held near 16%, little changed from roughly 17% in the prior quarter, as faster sales growth failed to translate into wider margins.
Celanese also completed cost-cutting moves it had previously flagged. The company finished closing an Engineered Materials compounding unit in Ulsan, South Korea, and completed a nylon 6,6 manufacturing network optimization ahead of schedule, while continuing work toward closing an acetate tow facility in Lanaken, Belgium. Together the actions are expected to generate more than $50 million in annualized fixed-cost savings, building on a Singapore nylon 6,6 closure the company had only announced, not completed, as of the first quarter.
Free cash flow rebounded to $140 million in the second quarter from just $3 million in the first, though operating cash flow of $209 million remained well below the $410 million Celanese generated in the second quarter of 2024. Net earnings attributable to the company rose to $125 million from $44 million in the first quarter but stayed below the $197 million posted a year earlier.
Celanese reiterated full-year 2024 guidance of approximately $6.00 in adjusted earnings per share and $700 million to $800 million in free cash flow, unchanged from the raised free-cash-flow outlook it gave with first-quarter results. For the third quarter, the company guided adjusted earnings of approximately $1.35 to $1.75 a share, well below the second quarter's $2.45, citing fading supply-related pricing opportunities and higher raw material costs in Engineered Materials.
The company's effective tax rate held at 8% in the second quarter, but it was higher than the same period a year earlier, when non-recurring favorable items — including changes in uncertain tax positions and deferred tax benefits tied to integration transactions — had lowered the prior-year rate. Celanese also disclosed a presentation change beginning this quarter, reclassifying certain other income out of equity earnings and into non-operating pension expense, with prior periods revised to conform.