Celanese Corporation ( CE ) shares are tumbling on Tuesday after the company reported worse-than-expected third-quarter financial results and announced it intends to temporarily reduce its quarterly dividend.

What Happened: Celanese reported third-quarter adjusted earnings per share of $2.44, missing analyst estimates of $2.85. The company reported sales of $2.65 billion, missing analyst estimates of $2.7 billion, according to Benzinga Pro.

Celanese reported adjusted EBIT of $457 million, operating EBITDA of $644 million and operating profit of $248 million.

The company stated in its earnings release that it has implemented multiple measures to address challenges in the demand environment. Notably, it plans to reduce its quarterly dividend by approximately 95%, starting in the first quarter of 2025.

“In the third quarter, we faced a severely constrained demand environment that, in some cases like auto, degraded swiftly. I want to thank our teams for executing our value enhancing initiatives that are delivering improvements today while also laying the foundation for future growth,” said Lori Ryerkerk, chair and CEO of Celanese.

“Still, these actions have been increasingly offset in the current environment and the earnings generated fell short of our expectations. In response we are taking additional measures to navigate current challenges while positioning Celanese for long-term success. We are confident these actions will accelerate our growth and enhance long-term value.”

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Celanese said it reduced its manufacturing costs by temporarily halting production at select facilities worldwide. The company anticipates a $200 million boost in cash flow from inventory reductions in the fourth quarter. Celanese noted that it’s targeting over $75 million in savings by the end of 2025.

Following the company’s earnings report, Wells Fargo analyst Michael Sison downgraded Celanese from an Overweight rating to an Equal-Weight rating and lowered the price target from $165 to $115. Mizuho analyst Kieran De Brun maintained a Neutral rating and lowered the price target from $132 to $120.

CE Price Action: At the time of publication, Celanese shares are down 24.7%, trading at $93.15, according to data from Benzinga Pro.

Image: 777546 from Pixabay