EARNINGS PREVIEW: Europe Chemicals Results Set To Bolster Views

TAKING THE PULSE: European chemical stocks have reached record highs this year, buoyed by recovery in the industry since 2009, optimism on profits and further consolidation in the sector, and first-quarter results are likely to underpin those dynamics.

Earlier this month, Belgium-based Solvay SA (SOLB.BT) said it will buy France's Rhodia SA (RHA.FR) and analysts expect deal activity in the chemical sector may set a record this year, helping to support the shares of companies such as Lanxess AG (LXS.XE) of German and Arkema (AKE.FR) of France.

The industry has many drivers. Earlier this month, Swiss agrochemicals giant Syngenta AG (SYST.VX) said the food price rally that is hurting industries across the globe helped boost its first-quarter sales and allow it to raise prices for various seeds and crop protection products.

Other European chemical companies reporting first-quarter results in coming days include the following:

Akzo Nobel NV (AKZA.AE) -- April 21, 0600 GMT

MARKET EXPECTATIONS: The Dutch Coatings and chemicals company should report higher first-quarter earnings before interest, tax, depreciation and amortization, or Ebitda, driven by better volumes and faster price rises. The specialty chemicals unit should have been able to pass on higher raw material costs but its coatings divisions may take more time doing so. Akzo Nobel is expected to reiterate its outlook to increase revenue and Ebitda by 5% in 2011.

MAIN FOCUS: Comments on pricing and higher raw material costs.

Air Liquide SA (AI.FR) -- April 26, 0530 GMT

MARKET EXPECTATIONS: JP Morgan forecasts an 8.7% jump in first-quarter sales to EUR3.41 billion. Air Liquide has told investors that it is confident it can continue to generate "steady growth" in its net profit this year.

MAIN FOCUS: The French company has said it expects to be able to "seize many growth opportunities," so any update on expansion plans will be of interest, particularly if it gives new details on potential acquisitions.

Merck KGaA (MRK.XE) -- April 28, 0500 GMT

MARKET EXPECTATIONS: Further growth is expected at Performance Materials. Merck's Liquid Crystals, which has a high exposure to TVs, should benefit from favorable growth in the consumer electronics market. Liquid crystal production near Tokyo was uninterrupted by the earthquake and its aftermath and the overall impact is seen as limited. Still, due to a supply shortage, UniCredit expects a negative volume effect in the second quarter.

MARKET FOCUS: There's keen interest in Merck's plans to streamline efficiency and reduce complexity at its pharmaceutical division.

Bayer AG (BAYN.XE) -- April 28, 0530 GMT

MARKET EXPECTATIONS: Earnings should be driven by a recovery at MaterialScience and CropScience. MaterialScience is expected to have had a strong quarter given continued improvement in all customer industries while a better product mix, volume growth in polyurethanes and polycarbonates should offset higher raw material costs.

MAIN FOCUS: News on Bayer's Xarelto heart drug will be of keen interest due to remaining uncertainty over the new medicine's prospects and sales potential.

Yara International ASA (YAR.OS)-- April 29 , 0500 GMT

MARKET EXPECTATIONS: Norwegian company Yara is expected to report a strong set of first-quarter numbers but flag for cost increases due to high energy prices. Citigroup says "urea prices have been weaker than expected in the first quarter of 2011 and high European gas prices have pushed much of Yara's production towards the upper end of the cost curve" but the bank still forecasts a near doubling in earnings per share compared to the year ago period, driven by strong demand and high prices for nitrates, NPKs [Nitrogen, Phosphorus and Potassium] and ammonia. Handelsbanken Capital Markets predicts sales will rise 11.7% from the year-ago-period and expects a 26.9% increase in adjusted EBIT.

MAIN FOCUS: Aside from business, interest is in Yara's operations in Libya, where production has been down since February due to political unrest. Handelsbanken Capital Markets says the closure should lead to lost pre-tax earnings of NOK90 million and assumes the Libyan operations will be closed for the rest of 2011.

Wacker Chemie AG (WCH.XE) - May 4, 0515 GMT

MARKET EXPECTATIONS: Germany's Wacker should have benefited from a strong polysilicon demand from the solar industry. Citigroup analysts point to the strong expansion of solar equipment capacity, mainly in China. At the Siltronic section, Credit Suisse sees market share gains due to the earthquake and aftermath in Japan.

MAIN FOCUS: Analysts wonder about the sustainability of positive effects related to problems of Japanese competitors. Comments on pricing pressure due to capacity additions by competing silicon producers and higher raw material costs will also be in focus.

Linde AG (LIN.XE)--May 4, 0530 GMT

MARKET EXPECTATIONS: Analysts expect the German company's sales to come in higher, driven by a good performance by the gases and engineering divisions. Earnings are expected to have been boosted by its cost efficiency program. Confirmation of the 2011 and medium-term targets are expected.

MAIN FOCUS: Any price pressure in Linde's cylinder business, which could hurt short-term margins.

Rhodia SA (RHA.FR) -- Expected May 5, 0530 GMT

MARKET EXPECTATIONS: Investors expect the company's update to confirm its belief that exposure to fast-growing countries is still putting wind in its sails. This is particularly true now that Solvay (SOLB.BT, SVYZY) has said it plans to acquire the French company with a view to expanding its footprint in these markets.

MAIN FOCUS: Investors and market observers will be keen to have an update on how the friendly tie-up with Solvay is coming along, and for reassurance that it will indeed come to fruition.

BASF SE (BAS.XE) -- May 6, 0500 GMT

MARKET EXPECTATIONS: BASF is expected to report a solid quarter amid very strong business trends, and the Chemicals and Plastics unit is expected to profit from the momentum along with high cracker margins. Deutsche Bank forecasts EBIT will rise 26%, and expects the company to reiterate guidance for significantly higher EBIT in 2011. Unrest in Libya and a shutdown of production there should be offset by higher oil and gas prices.

MAIN FOCUS: Investors will focus on the effects of pricing leverage and cost-cutting and operational performance. An indirect impact from the Japanese disaster isn't visible yet, UniCredit says, and indirect effects in the chemical industry were a further tightening of chemical products rather than lower demand.

Clariant AG (CLN.VX) - Expected May 6, 0500 GMT

MARKET EXPECTATIONS: Investors expect an update on Sued-Chemie (SUC.XE) and backing of 2011 targets. Deutsche Bank sees net profit at CHF106 million from CHF6 million year-ago, on revenue of CHF1.80 billion, from CHF1.82 billion.

MAIN FOCUS: The strong Swiss franc will take a sizable chunk off Clariant's revenue, though profits are shielded through a significant natural hedge, says Unicredit. Management efforts to cut costs and lift prices are also in focus. "Sentiment should improve if companies can explain that higher raw material costs are manageable," says Unicredit in a sector preview.

Solvay SA (SOLV.BT) -- Expected May 9, 1600 GMT

MARKET EXPECTATIONS: The consensus expectation among analysts is for net profit to decline to EUR57 million from EUR1.73 billion a year earlier, according to a survey conducted for the company. A year-on-year comparison is a difficult because Solvay sold its pharmaceutical operations in last year's first quarter, booking a capital gain of EUR1.7 billion, net of taxes.

MAIN FOCUS: As with Rhodia, the planned tie-up between the two companies will be a key focus as investors look to the companies' management for a progress report on how the project is coming along. The quarterly results and outlooks of both companies also will give investors and observers an updated view of how complementary the two companies' positions are in the current market.

K+S AG (SDF.XE) -- Expected May 11, 0500 GMT

MARKET EXPECTATIONS: Analysts expect high volumes at its fertilizer unit to have generated strong sales. Operating earnings are expected to have risen on high prices for fertilizer products and a robust salt business.

MAIN FOCUS: Higher potash prices are a key topic as well as whether production expansion potential from the Legacy project is higher than previously expected.

Lanxess AG (LXS.XE) - May 11, 0530 GMT

MARKET EXPECTATIONS: Analysts expect a strong quarter buoyed by high demand, both from tire sector and the agrochemical sector, helped by an early start to the planting season in Europe and strong demand from farmers. The resulting increase in capacity utilization should support margins and counterbalance temporary negative effects from the significant increase in raw material costs, said Warburg.

MAIN FOCUS: Analysts will focus on comments on mid-term goals which seem to be well on track. They will also look at how much Lanxess benefited from recent price increases.

-By Sten Stovall, Dow Jones Newswires; [phone]; [e-mail]

(Adam Mitchell in Paris, Anna van der Muelen in Amsterdam, Katarina Gustafsson in Stockholm, Natascha Divac, Harriet Torry and Hilde Messer in Frankfurt and Katharina Bart in Zurich contributed to this article.)