Material ETFs Stand Tall Amid Weak Q4 Earnings

Basic materials is one of the weakest sectors this reporting cycle. Earnings from about 70.5% of the sector’s total market capitalization reported so far are down 5.5% on 0.6% revenue growth.

Let’s dig into the earnings report of some of the well-known players in the sector:

Earnings in Focus

U.S. chemical giant DowDuPont (DWDP - Free Report) reported earnings per share of 88 cents, missing the Zacks Consensus Estimate by a penny but improving 6% from the year-ago quarter. Revenues were flat year over year at $20.1 billion but fell short of the estimated $20.1 billion.

PPG Industries (PPG - Free Report) topped earnings estimates but lagged on revenues. Earnings per share of $1.15 came ahead of the Zacks Consensus Estimate of $1.09, while revenues of $3.64 billion were slightly below the estimated $3.65 billion. On a year-over-year basis, earnings were up 73%, while revenues dipped 1%.

Industrial gas giant Air Products & Chemicals (APD - Free Report) lagged on both fronts. Earnings per share were below the Zacks Consensus Estimate by a penny and revenues fell shy by $65 million. Earnings were up 4% while revenues came on par with the year-ago quarter.

Chemical maker LyondellBasell Industries (LYB - Free Report) came up with earnings of $1.83 per share, trailing the Zacks Consensus Estimate of $2.13. Revenues of $8.9 billion also lagged the estimated $9.22 billion and fell 2.8% year over year.  

ETFs in Focus

Given a string of downbeat results, the material sector is down 1.8% (aggregate one-day stock market reaction to earnings releases) in response to earnings announcements. However, it was unable to take the sheen away from material ETFs that are up nearly 1% over the past week. Below we have highlighted those ETFs that have the top 10 holdings in these chemical titans. All these have a Zacks ETF Rank #3 (Hold), suggesting potential upside in the coming weeks.

iShares U.S. Basic Materials ETF (IYM - Free Report)

1 2
View single page >> |

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.