Why Celanese's Shares Popped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Celanese (NYS: CE) jumped more than 10% in early trading after the company released earnings.

So what: Revenue was actually weaker than expected, growing just 4% to $1.68 billion when analysts expected $1.73 billion. But net income was strong, coming in at $210 million, or an adjusted $1.47 per share, when analysts expected just $1.39 per share.

Now what: The weak economy in Europe was blamed for the revenue miss, but the company's minority investments made up the slack in the quarter. For the rest of the year management is expecting earnings per share of $2.20, versus $2.15 from analysts, so the company appears to be performing well on the bottom line. Considering the slow growth rate, paying 17 times 2012 earnings is a steep price and that will keep me from being a buyer on the jump today.

Interested in more info on Celanese? Add it to your watchlist byclicking here.

The article Why Celanese's Shares Popped originally appeared on Fool.com.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.