By KRISTIN JONES
TAKING THE PULSE: As the European recession ground on
in the first few months of the year, US chemical companies felt
the pain. Some, like Dow Chemical, detailed their exposure to
the slump in Europe's industrial demand. Dow said last month it
would close plants and lay off 900 workers.
At the same time, emerging markets, the reliable heroes of
so many companies' rebound from the recession, posed a
different question: How slow can China's slowdown go? Macro
observers will read the tea leaves in these reports.
On the bright side, the revving of the US auto industry and
an uptick in American manufacturing means more demand for
chemicals, and customers may finally be restocking, after
scraping the dregs of their inventories.
COMPANIES TO WATCH:
- reports April 19
Wall Street Expectations: Analysts polled
by Thomson Reuters predict a profit of $1.54 a share
on revenue of $11.24 billion. A year earlier, DuPont posted
per-share earnings of $1.52 on total revenue of $10.03
Key Issues: DuPont, a diversified US
manufacturer, fell short of analysts' profit predictions in the
fourth quarter and noted that customers were
destocking--working through existing inventories rather than
buying new products. In January, the company said it expected
consumer electronics customers to continue to destock early in
But a rebound in US auto making and other manufacturing in
North America may give a bottom-line boost. The company has
benefited from higher pricing, offsetting raw material
Air Products & Chemicals - reports April 24
Wall Street Expectations: Analysts expect a fiscal
second-quarter profit of $1.38 a share on revenue of $2.51
billion. A year earlier, the company reported earnings of $1.39
a share, or $1.41 excluding charges tied to its failed takeover
bid for rival Airgas, on revenue of $2.5 billion.
Key Issues: The specialty gas supplier and
chemical maker has said it expects global economic conditions
to continue to pressure second-quarter volumes and earnings,
before growth in Asia and North America accelerates in the
second half of the year. Emerging markets have been a key
driver of growth for Air Products, offsetting weakness in
Europe, but business in China seems to be falling short of
expectations lately, Barclays analysts said last month.
In January, the company agreed to sell its European
home-care business to Linde for 590 million ($750.7
million) as it focuses on its core gases business. The
home-care business will count as discontinued operations in the
Praxair - reports April 25
Wall Street Expectations: Praxair's profit is expected
to be $1.36 a share on revenue of $2.83 billion. A year
earlier, it posted a profit of $1.29 on revenue of $2.7
Key Issues: Praxair, the largest industrial
gas company in the Americas, has benefited from sales growth in
Asia and South America, as well as continued strength in its
core North American markets. In the last year, the company has
seen revenue growth across regions. However, a strong US dollar
may weigh on first-quarter earnings, Praxair warned in
Dow Chemical - reports April 26
Wall Street Expectations: Dow Chemical is
expected to report earnings of 58 cents a share on $14.95
billion in revenue for the first quarter. A year earlier, it
reported a profit of 54 cents on revenue of $14.73 billion.
Excluding acquisition costs and other items, earnings a
year earlier were 82 cents a share.
Key Issues: A slump in the European economy has taken
its toll on Dow Chemical after a year in which income and
revenue soared. The biggest US chemicals company by revenue,
Dow Chemical said earlier this month that it would cut roughly
1.7% of its global work force and close plants in Europe, North
America and Latin America to control costs.
On a positive note, the maker of chemicals used in
everything from diapers to electronics continues to benefit
from strong demand in emerging markets, pricing increases, and
cheap North American feedstock.
LyondellBasell - reports April 30
Wall Street Expectations: LyondellBasell is expected
to earn $1.05 a share on revenue of $12.01 billion. A year
earlier, it posted a profit of $1.15 a share on revenue of
Key Issues: The company, formed after the
2007 merger of Houston-based Lyondell and Rotterdam-based
Basell, has seen better luck since it emerged from Chapter 11
bankruptcy in 2010. Fueled by cheap American ethane, the
company has improved its operating results, controlled costs
and won rating upgrades.
The plastics and chemicals company said in February that it
expected activity in Europe and Asia to remain slow for some
businesses, but US operations were strengthening.
(The Thomson Reuters financial estimates and
year-earlier figures may not be comparable due to one-time
items and other adjustments.)
Dow Jones Newswires