4 Top Chemical Stocks: Earnings Preview

NEW YORK ( TheStreet) -- They make things like polymers, adhesives, resins, caustics, solvents, abrasives and ethers.

They manufacture such substances as polyethylene and polyurethane and polypropylene and polybutylene terephthalate and ethylene dichloride and estrobond triacetin plasticizer, which is what becomes the filters on cigarettes.

And they're as necessary to the civilization we find ourselves in as roads and running water.

Chemicals: It's one of those behind-the-curtain industries no one thinks about (or wants to think about) until they drive by one of their sprawling plants, all smokestack and twisting pipe, like some science-fiction city -- or consider buying one of their stocks.

It's an interesting moment for chemicals, split into two subsectors, the commodity chemicals and the "performance" or "specialty" chemicals. The chemical companies on our list of four -- Dow Chemical ( DOW), DuPont ( DD), Eastman Chemical ( EMN) and Celanese ( CE) -- are among the biggest and the baddest in the land, and they've all benefited since the second quarter from a potent combo: quickening demand, especially in export markets, and declining raw materials costs. This last dynamic is especially true in the commodity chemicals realm, where natural gas, a crucial feedstock, remains cheap.

Analysts and company observers are looking for robust results from this crowd, though perhaps profits could be drifting lower as the autumn closes out and winter begins.

With all that in mind, we offer a look at four chemicals stocks on the cusp of third-quarter reporting season....

Celanese

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Earnings Date: Tuesday, Oct. 26, before the bell.

EPS Estimate: 73 cents a share vs. 58 cents a year ago.

Revenue Estimate:$1.48 billion vs. $1.3 billion a year ago.

Key Themes: The Dallas-based Celanese has a habit of guiding and beating Wall Street estimates. Look for the same this quarter as the company, with plenty of exposure to China, has benefited from sales into the world's fastest growing economy -- the recent interest rate hike notwithstanding.

Eastman Chemical

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Earnings Date: Thursday, Oct. 28, 5 p.m. EDT.

EPS Estimate: $2.21 a share vs. $1.38 a year ago.

Revenue Estimate: $1.71 billion vs. $1.34 billion a year ago.

Key Themes: Eastman Chemical has already raised guidance for its third quarter and the year -- twice -- so when the company discusses its quarterly performance later this month, it will likely begin to turn its attention to 2011. In September, CEO Jim Rogers offered up an EPS range of $2.20 to $2.30; with the Street at $2.21, investors might be inclined to expect the company to beat consensus.

The Kingsport, Tenn., company has introduced several new specialty products and continues to benefit from high prices and decent demand, though a seasonal slowdown in the winter is typical of chemical producers across the board.

DuPont

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Earnings Date: Tuesday, Oct. 26, before the bell.

EPS Estimate: 34 cents a share vs. 45 cents a year ago.

Revenue Estimate: $6.75 billion vs. $5.96 billion a year ago.

Key Themes: DuPont, the Delaware blue chip that has been in business since the time of Thomas Jefferson, has seen its stock outperform many of its brethren in the chemicals sector (we won't say "chemical brothers"), reaching new 52-week highs this month.

Several segments have helped the company, including the esoteric juices that go into electronics devices, titanium dioxide, and agriculture. As Monsanto's biggest genetically-modified seed rival, DuPont has taken potential market share as Monsanto has struggled. The recent spike in crop prices hasn't hurt DuPont, either. But the company, which announced its quarterly dividend Thursday morning, won't see its overall business really take off until the U.S. construction industry comes back from the dead. Many of DuPont's chemicals are used in home construction.

Dow Chemical

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Earnings Date: Thursday, Oct. 28, before the bell.

EPS Estimate: 41 cents a share vs. 24 cents a year ago.

Revenue Estimate: $12.7 billion vs. $12.05 billion a year ago.

Key Themes: Dow Chemical, which rose off the mat late last in year after nearly getting KO'd by badly timed acquisition of specialty chemicals company Rohm and Haas, has its diverse hands in both commodity and performance chemicals.

The company is set to benefit from strong fundamentals in the former. That means petrochemicals. Cheap natural gas has meant that Dow can make the stuff more cheaply than foreign competitors, which has meant that Dow's export business has boomed. Exports have become a bigger piece of the sales of U.S. petrochemical makers than ever. Profitability make shrink a bit sequentially as those strong fundamentals dissipate, however.

-- Written by Scott Eden in New York

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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