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Chemical Stocks to Watch for Earnings on Oct 21: DOW, CE & OLN

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20.10.2021

A few prominent chemical companies are slated to report their quarterly numbers tomorrow. Per the Zacks industry classification, the chemical industry falls under the broader Basic Materials sector. Basic Materials is among those sectors that are expected to deliver positive earnings growth in the third quarter. Overall earnings for the sector are projected to rise 139.9% on 36.7% higher revenues, per the latest Earnings Trends. A rebound in end-market demand from the coronavirus-induced slowdown is likely to have aided the performance of chemical companies in the third quarter. The industry reeled under the effects of demand shocks for much of the first half of last year as global industrial activities were put to a halt amid the pandemic. However, with the easing of restrictions on business activities globally, demand for chemicals started to pick up from the third quarter of 2020. The upturn in demand is being driven by a global upswing in manufacturing and industrial activities. Chemical makers are benefiting from a strong rebound in demand in key end-use markets, including automotive, building & construction and electronics. These companies are seeing higher demand from the automotive market notwithstanding the chip shortage, which continues to affect automotive production globally. Higher industrial demand is expected to have boosted sales volumes and the top line of chemical companies in the September quarter. However, chemical companies’ third-quarter results are expected to reflect the impacts of raw material cost inflation as well as higher supply chain and logistics costs. Supply........

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