A number of chemical companies are gearing up to report their quarterly numbers on May 1. Per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materialssector, which is among the Zacks sectors that are expected to score the strongest gains in Q1. Earnings for the sector are projected to surge 42.
1% in Q1 while revenues are expected to move up 21%, per the latest Earnings Preview.The chemical industry is riding high on an upswing in the global economy and continued demand strength across major end-use markets such as construction and automotive. Another positive for the industry is a recovery in demand in the energy space — a key chemical end-market that had been out of favor for a while. The recovery is being driven by a rebound in crude oil prices from their historic lows.
Notwithstanding a few challenges including raw material cost inflation, chemical companies are expected to continue the earnings momentum in the March quarter as the fundamental driving factors remain firmly in place.
Strategic measures including productivity improvement, pricing actions and portfolio restructuring are expected to continue to drive the performance of chemical makers in Q1. Cost-cutting measures by chemical companies should continue to yield industry-wide margin improvements. Synergies from acquisitions should also lend support to earnings. Moreover, President Donald Trump’s business-friendly tax reform is a positive for U.S. chemical stocks.
We take a look at four chemical companies that are gearing up to report their results tomorrow.
Ecolab Inc. ECLwill report Q1 earnings numbers ahead of the bell. The company has an Earnings ESPof 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 88 cents. While the stock carries a favorable Zacks Rank #3 (Hold), its ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ecolab surpassed the Zacks Consensus Estimate in two of the trailing four quarters while missed twice, delivering an average negative surprise of around 0.1%.
For Q1, the Zacks Consensus Estimate for revenues is pegged at $3,367 million, reflecting a rise of 6.5% year over year.
The Zacks Consensus Estimate for revenues for the company’s Global Industrial segment are pegged at $1,193 million. The figure reflects an increase of 5.7% from the year-ago figure.
For the Global Energy segment, the Zacks Consensus Estimate for revenues stand at $812 million, reflecting a rise of 7.3% on a year-over-year basis.
The Zacks Consensus Estimate for the Global Institutional segment is presently pegged at $1,133 billion, reflecting a year-over-year rise of 5.1%.
Strong expected performance in the Global Industrial segment is likely to drive the company’s top line. Further, an expected improvement in revenues in the other segments is likely to help the company generate solid results in Q1. (Read more: Will Global Industrial Unit Boost Ecolab's Q1 Earnings?)