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DALLAS - Celanese Corporation (NYSE:CE) shares fell 11.2% after the global chemical and specialty materials company issued a disappointing third-quarter outlook that overshadowed better-than-expected second-quarter results.
The company reported second-quarter adjusted earnings of $1.44 per share, exceeding analyst estimates of $1.40, while revenue reached $2.53 billion, slightly above the $2.5 billion consensus. However, investors focused on Celanese’s muted third-quarter guidance of $1.10 to $1.40 per share, well below analyst expectations of $1.73.
Celanese cited a softening demand environment across most key end-markets in the second half of the year, with order books developing at a slower pace compared to last quarter. The company also expects an approximate $25 million negative sequential impact to earnings due to ongoing inventory reduction efforts.
"Since the start of 2025, we have been clear that cash generation is our number one priority," said Scott Richardson, president and chief executive officer. "We anticipated the possibility of a challenging demand environment throughout the year and have emphasized the importance of cash generation, which has enabled us to pay off our delayed draw term loan."
The company’s second-quarter revenue increased 6% from the previous quarter, driven by a 4% rise in volume and 3% in currency, with a small offset in price. However, revenue was down 4.5% YoY from $2.65 billion in the same quarter last year.
Celanese generated $410 million in operating cash flow and $311 million in free cash flow during the quarter, allowing the company to repay the $200 million balance on its delayed draw term loan. The company also paid down an additional $150 million of its five-year term senior unsecured loan since the quarter’s end.
Despite the challenging outlook, Celanese maintained its expectation to deliver $700 to $800 million of free cash flow in 2025, emphasizing its focus on cash generation, cost reduction, and deleveraging its balance sheet.
"This is a challenging macro, and our teams are exhibiting resilience to continually find new areas to create value," Richardson added. "We are relentlessly focused on identifying additional actions and we continue to take steps to stabilize the business, right size our cost structure, and position our company for long-term value creation."
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