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Eastman Chemical (EMN) Completes Acid Manufacturing Facility

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Eastman Chemical Company (EMN - Free Report) has finished a new isobutyric acid manufacturing facility at its Kingsport, TN site. Production is expected to commence within the next few weeks.

The new facility along with the isobutyric acid manufacturing facility in Texas doubles Eastman Chemical’s production capacity, making it the premier isobutyric acid supplier in the global market.

Isobutyric acid has wide range of usages in various markets, including food flavors and fragrance, protective coatings and agriculture intermediates.

Eastman Chemical is committed to provide consistent isobutyric acid supply to customers globally and meet market demand for the product.

In a year’s time, shares of Eastman Chemical have outperformed the industry it belongs to. The stock has lost around 14.4% compared with the industry’s fall of 20.8%.



During the third-quarter earnings call, Eastman Chemical noted that strong volume gains in the specialty businesses, disciplined cost management and a lower effective tax rate have helped it achieve year-over-year adjusted earnings per share growth of 13% during the first nine months of 2018. The company continues to expect year-over-year adjusted earnings per share growth of 10-14% for 2018. The company also expects to generate roughly $1.1 billion of free cash flow in 2018.

Eastman Chemical is focused on productivity and cost-cutting actions, which are helping it offset raw-material cost inflation and other cost headwinds. For 2018, Eastman Chemical expects to deliver $100 million of savings under its cost-reduction program.

Eastman Chemical has been seeing a rise in raw-materials costs, mostly in its chemical intermediates business. Raw-materials cost headwind is expected to persist through the remainder of 2018. Nevertheless, the company’s productivity and price hike actions are likely to help it offset the input cost pressure.

Eastman Chemical Company Price and Consensus

 

 

Zacks Rank & Stocks to Consider

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space include CF Industries Holdings, Inc (CF - Free Report) , Methanex Corporation (MEOH - Free Report) and The Mosaic Company (MOS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have risen 13.6% in the past year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have gained 3.3% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 7%. The company’s shares have rallied 45.4% in the past year.

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