(Reuters) -Chemicals maker Celanese forecast third-quarter profit below estimates on Monday, anticipating waning demand across most of its key markets in the second half of the year, sending its shares down 14.6% in extended trading.
The chemical industry has been struggling with higher energy costs, as well as weak demand and prices, especially in the European markets where strict regulations have further raised the cost of manufacturing.
U.S. President Donald Trump’s erratic trade policy has added to the uncertainty in the industry.
The company, which makes chemical products used in coatings, paints and pharmaceutical products and polymers, projected adjusted profit of $1.10 to $1.40 per share in the third quarter.
Analysts on average were expecting $1.73 per share, according to data compiled by LSEG.
Celanese anticipates slowing demand to partially offset the benefits from the cost-cuts, which are expected to be realized in the third quarter.
However, the Irving, Texas-based company reported adjusted profit of $1.44 per share in the second quarter, beating estimates of $1.40 on the back of cost-cutting measures.
“We are also pleased that the deliberate actions we took drove earnings results for us this quarter,” CEO Scott Richardson said.
“However, the demand environment does not seem to be improving.”
The company said it has progressed to the second round of the divestiture process for its electronics segment, Micromax, having attracted interest from a number of potential buyers.
Celanese had said in May it would spin off Micromax, a supplier of electronic inks and pastes designed for high-performance electronics, as the company looked to generate cash and cut debt.
Materials from the Micromax unit are used in applications including navigation and defense, medical monitoring and advanced circuit board components.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Shreya Biswas)
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