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Can Eastman Chemical (EMN) Sustain Earnings Streak in Q2?
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Eastman Chemical Company (EMN - Free Report) is set to release second-quarter 2018 results after the closing bell on Jul 26.
Eastman Chemical saw higher profits in the first quarter, aided by strong growth in its specialty businesses and cost-management actions. Adjusted earnings of $2.23 per share for the quarter topped the Zacks Consensus Estimate of $2.11.
Revenues rose around 13% year over year to $2,607 million in the quarter, also coming ahead of the Zacks Consensus Estimate of $2,461 million.
Eastman Chemical has outperformed the industry it belongs to over a year. The company’s shares have gained around 17.6% over this period, compared with roughly 6.1% growth recorded by the industry.
Eastman Chemical topped the Zacks Consensus Estimate in each of the trailing four quarters with an average earnings beat of roughly 17.8%.
Is the company poised for another winning quarter? Let's see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that Eastman Chemical is likely to beat on earnings estimates this quarter. This is because it has the right combination of two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Zacks ESP: Earnings ESP for Eastman Chemical is currently pegged at +1.25%. This is because the Most Accurate estimate stands at $2.23 while the Zacks Consensus Estimate is pegged at $2.20. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Eastman Chemical currently carries a Zacks Rank #2. The combination of a favorable Zacks Rank and a positive ESP makes us reasonably confident of an earnings beat.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Watch For
Eastman Chemical, in April, raised its earnings growth expectations for 2018 based on strong first-quarter results. The company now expects adjusted earnings per share growth for 2018 to be 10-14% year over year, up from its prior view of 8-12% growth. The company also noted that it will remain committed to offset volatility in raw material and energy prices, especially olefins.
Revenues for Eastman Chemical for the second quarter is projected to rise roughly 7.7% year over year as the Zacks Consensus Estimate for the quarter is currently pegged at $2,606 million.
Revenues from Eastman Chemical’s Additives and Functional Products division is anticipated to witness a 2.6% rise from the first quarter as the Zacks Consensus Estimate for the second quarter is pegged at $963 million.
Advanced Materials unit’s revenues are expected to increase 2.9% on a sequential comparison basis as the Zacks Consensus Estimate for the second quarter is $713 million.
Revenues for the Chemical Intermediates segment are projected to fall 4.7% from the first quarter as the Zacks Consensus Estimate for the second quarter stands at $696 million.
Moreover, the Fibers segment is expected to witness a 9.8% decline in revenues sequentially as the Zacks Consensus Estimate is pegged at $221 million for the second quarter.
Eastman Chemical’s high margin products and its aggressive cost management actions are likely to continue to drive its earnings in the second quarter. The company should gain from sustained growth of its high margins specialty products.
The company’s focus on productivity and cost-cutting actions is also helping it to offset raw material cost inflation and other cost headwinds. It is expected to deliver $100 million of cost savings in 2018 under its cost-reduction program.
Eastman Chemical should also gain from synergies of acquisitions, especially Taminco Corporation. The Taminco acquisition has provided attractive cost and revenue synergy opportunities.
However, the company is exposed to volatility in ethylene prices which is weighing on its margins. Eastman Chemical is also seeing a spike in raw material costs, which is anticipated to persist in the second quarter. The company expects raw material and energy prices, especially for olefins, to be volatile through 2018.
Nevertheless, the company’s productivity measures and actions to increase selling prices of its products are expected to help it offset the impact of these headwinds in the to-be-reported quarter.
Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
TimkenSteel Corporation has an Earnings ESP of +4.21% and carries a Zacks Rank #2.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Can Eastman Chemical (EMN) Sustain Earnings Streak in Q2?
Eastman Chemical Company (EMN - Free Report) is set to release second-quarter 2018 results after the closing bell on Jul 26.
Eastman Chemical saw higher profits in the first quarter, aided by strong growth in its specialty businesses and cost-management actions. Adjusted earnings of $2.23 per share for the quarter topped the Zacks Consensus Estimate of $2.11.
Revenues rose around 13% year over year to $2,607 million in the quarter, also coming ahead of the Zacks Consensus Estimate of $2,461 million.
Eastman Chemical has outperformed the industry it belongs to over a year. The company’s shares have gained around 17.6% over this period, compared with roughly 6.1% growth recorded by the industry.
Eastman Chemical topped the Zacks Consensus Estimate in each of the trailing four quarters with an average earnings beat of roughly 17.8%.
Is the company poised for another winning quarter? Let's see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that Eastman Chemical is likely to beat on earnings estimates this quarter. This is because it has the right combination of two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Zacks ESP: Earnings ESP for Eastman Chemical is currently pegged at +1.25%. This is because the Most Accurate estimate stands at $2.23 while the Zacks Consensus Estimate is pegged at $2.20. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Eastman Chemical currently carries a Zacks Rank #2. The combination of a favorable Zacks Rank and a positive ESP makes us reasonably confident of an earnings beat.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Watch For
Eastman Chemical, in April, raised its earnings growth expectations for 2018 based on strong first-quarter results. The company now expects adjusted earnings per share growth for 2018 to be 10-14% year over year, up from its prior view of 8-12% growth. The company also noted that it will remain committed to offset volatility in raw material and energy prices, especially olefins.
Revenues for Eastman Chemical for the second quarter is projected to rise roughly 7.7% year over year as the Zacks Consensus Estimate for the quarter is currently pegged at $2,606 million.
Revenues from Eastman Chemical’s Additives and Functional Products division is anticipated to witness a 2.6% rise from the first quarter as the Zacks Consensus Estimate for the second quarter is pegged at $963 million.
Advanced Materials unit’s revenues are expected to increase 2.9% on a sequential comparison basis as the Zacks Consensus Estimate for the second quarter is $713 million.
Revenues for the Chemical Intermediates segment are projected to fall 4.7% from the first quarter as the Zacks Consensus Estimate for the second quarter stands at $696 million.
Moreover, the Fibers segment is expected to witness a 9.8% decline in revenues sequentially as the Zacks Consensus Estimate is pegged at $221 million for the second quarter.
Eastman Chemical’s high margin products and its aggressive cost management actions are likely to continue to drive its earnings in the second quarter. The company should gain from sustained growth of its high margins specialty products.
The company’s focus on productivity and cost-cutting actions is also helping it to offset raw material cost inflation and other cost headwinds. It is expected to deliver $100 million of cost savings in 2018 under its cost-reduction program.
Eastman Chemical should also gain from synergies of acquisitions, especially Taminco Corporation. The Taminco acquisition has provided attractive cost and revenue synergy opportunities.
However, the company is exposed to volatility in ethylene prices which is weighing on its margins. Eastman Chemical is also seeing a spike in raw material costs, which is anticipated to persist in the second quarter. The company expects raw material and energy prices, especially for olefins, to be volatile through 2018.
Nevertheless, the company’s productivity measures and actions to increase selling prices of its products are expected to help it offset the impact of these headwinds in the to-be-reported quarter.
Eastman Chemical Company Price and EPS Surprise
Eastman Chemical Company price-eps-surprise | Eastman Chemical Company Quote
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
Orion Engineered Carbons, S.A. (OEC - Free Report) has an Earnings ESP of +3.85% and sports a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
TimkenSteel Corporation has an Earnings ESP of +4.21% and carries a Zacks Rank #2.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>