A host of chemical companies are gearing up to report their quarterly numbers on May 2. The chemical industry is gradually gaining strength on continued momentum across automotive and construction – the two key end-markets for chemicals. While the industry remains exposed to several headwinds including concerns over China’s economy and weak demand in the energy and agriculture markets, its upturn is expected to last this year on continued strength in the light vehicles market, positive trends in the construction space and significant shale-linked capital investment.
Strategic initiatives including continued focus on cost and productivity, operational efficiency improvement and expansion of scale through acquisitions should also help chemical makers weather macroeconomic and industry-specific headwinds in 2017.
As per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. Based on the Earnings Preview as of Apr 28, 70% of the sector participants on the S&P 500 index have reported their quarterly numbers. Earnings for these companies increased 19.9% from the same period last year while sales rose 6.5%.
Basic Materials is among the four sectors that are forecast to see double-digit earnings growth in the first quarter. Overall earnings for the sector are projected to rise 16.9% while revenues are expected to increase 2.1%.
We take a sneak peek into five chemical companies that are gearing up to report first-quarter results on May 2.
FMC Corporation FMC, which will report results after the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 56 cents. While the stock carries a Zacks Rank #2 (Buy), its 0.00% ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company beat the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 7.23%. FMC Corp. should benefit from its strategic investments, acquisitions, strength in the lithium business as well as efforts to expand its market position and strengthen its portfolio. (Read more: FMC Corp Q1 Earnings: What's in Store for the Stock?)
FMC Corporation Price and EPS Surprise
FMC Corporation Price and EPS Surprise | FMC Corporation Quote
Westlake Chemical Corporation WLK will report results before the bell. The company is expected to come up with a positive earnings surprise as it has an Earnings ESP of +1.25% and carries a favorable Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company beat the Zacks Consensus Estimate in three of the trailing four quarters while missed in the other, resulting in an average positive surprise of 11.14%. The company is expected to benefit from strong demand and rising prices for Vinyls and Olefins products. Westlake should also to gain from improving commodity prices along with continued recovery of crude oil prices. (Read more: Is Westlake Chemical Poised to Beat on Q1 Earnings?)