Celanese pulls 2008 guidance as demand weakens

20 November 2008 23:56  [Source: ICIS news]

HOUSTON (ICIS news)--Celanese pulled its 2008 earnings guidance on Thursday as the company's shares plunged 23% to an all-time low, with the company saying economic conditions have had more of an impact than it expected.

The Dallas, Texas-based producer said its 2008 results will trail already lowered expectations due to the weakening global economy, particularly in Asia.

"The slowing economic environment is having a more substantial impact on consumer demand and the entire supply chain than previously anticipated, resulting in reduced volumes in our businesses," chief executive David Weidman said in a statement.

In October, Celanese lowered its earnings/share (EPS) outlook for full year 2008 to a range of $3.40-$3.55 from the previous estimate of $3.60-$3.85 due to effects of the global economic downturn.

Celanese said its balance sheet and liquidity remained strong and it expects positive adjusted free cash flow during the fourth quarter of 2008 and in 2009.

The company's NYSE-listed shares closed at $8.46 Thursday, a considerable drop from Wednesday's $11.08 close. Celanese's previous all-time low was $13.54 in May 2005.

A company spokesman said Celanese did not comment on stock movements.

A market observer said the announcement by Germany's BASF of production cutbacks and idling plants worldwide created a shock wave that struck many chemical stocks this week.

Recent downturns in China, particularly in the acetic acid market there where Celanese has a huge stake, might have added weight to firm's stock drop this week.

"They're viewed as leveraged to Asia, so that's another reason to beat up on Celanese," the source said.

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By: Lane Kelley
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