Celanese Corporation has recently released its 10-Q report, providing a detailed look into the company's financial performance and operations. Celanese Corporation is a chemical and specialty materials company that operates through two segments: Engineered Materials and Acetyl Chain. The Engineered Materials segment focuses on developing and supplying specialty polymers for various applications, including automotive, medical, industrial products, and consumer electronics. On the other hand, the Acetyl Chain segment produces and supplies acetyl products used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals.
In the 10-Q report, Celanese Corporation reported a decrease in net sales of $144 million, or 5%, for the three months ended June 30, 2024, compared to the same period in 2023. This decline was primarily attributed to lower pricing and volume in both the Engineered Materials and Acetyl Chain segments. The company also experienced an unfavorable currency impact due to a weaker Chinese Yuan and Japanese Yen relative to the U.S. dollar.
Furthermore, the operating profit decreased by $85 million, or 25%, for the three months ended June 30, 2024, compared to the same period in 2023. This decline was primarily due to lower net sales across the segments and an unfavorable impact of $38 million related to restructuring costs in the Engineered Materials segment.
Despite the overall decrease in net sales and operating profit, there were some positive developments. The equity in net earnings of affiliates increased by $28 million, or 122%, for the three months ended June 30, 2024, compared to the same period in 2023. This increase was primarily driven by higher earnings from strategic affiliates, such as Mylar Specialty Films and Ibn Sina.
Additionally, the effective income tax rate for the three months ended June 30, 2024, was 16%, compared to a tax benefit of 2% for the same period in 2023. This change was primarily due to non-recurring tax effects related to internal debt restructuring transactions for the three months ended June 30, 2024, and prior year non-recurring decreases in valuation allowances on U.S. foreign tax credit carryforwards due to changes in forecasted foreign sourced income and expenses during the carryforward period. The market has reacted to these announcements by moving the company's shares -4.4% to a price of $131.55. For more information, read the company's full 10-Q submission here.
