Celanese Corp (NYSE:CE) stock fell 11.41% (As on August 12, 11:22:02 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY25. Celanese ended the quarter with cash and cash equivalents of $1,173 million, up roughly 23.3% sequentially. Long-term debt was up 2.5% sequentially to $12,689 million. Cash provided by operating activities was $410 million and free cash flow was $311 million in the reported quarter.
Moreover, net sales in the Engineered Materials unit were $1,442 million in the reported quarter, down around 1.7% year over year. It beat our estimate of $1,368.7 million. The segment reported an operating profit of $165 million and an adjusted EBIT of $214 million for the second quarter. The Acetyl Chain segment posted net sales of $1,115 million, down roughly 7.2% year over year. It beat our estimate of $1,102.2 million. The segment generated an operating profit of $154 million and an adjusted EBIT of $196 million in the second quarter.
Moreover, Celanese has undertaken several strategic initiatives to enhance its financial stability and growth. This includes fully repaid the $200 million balance on the delayed draw term loan originally due in the first quarter of 2026. The company has completed a new credit agreement and a $1.75 billion senior unsecured revolving credit facility, reinforcing liquidity through 2030. The company progressed to the second round of the Micromax divestiture process. The company has announced plans to exit the Sempach, Switzerland Elotex® location and the Engineered Materials Vamac location in Sarnia, Canada, targeting $5 to $10 million in cost savings in 2026.
CE in the second quarter of FY25 has reported the adjusted earnings per share of $1.44, beating the analysts’ estimates for the adjusted earnings per share of $1.38, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue decline of 4.5 percent to $2.53 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $2.50 billion. The decline in net sales was a result of a decrease in pricing and volumes. Prices fell 4% year over year in the quarter.
Celanese projects a softer demand environment across most key end-markets for the second half of the year. The company expects that slowing demand will partly offset the benefits of its cost reduction initiatives, which are anticipated to be realized in the third quarter. Earnings are also expected to face an approximate $25 million sequential negative impact due to ongoing inventory reduction efforts. In response to the uncertain low-demand conditions, Celanese remains focused on maximizing cash flow and maintaining operational agility to align operations with available demand. For the third quarter, the company forecasts adjusted earnings per share in the range of $1.10 to $1.40 and reaffirms its expectation to generate $700 million to $800 million in free cash flow for 2025.