Eastman Chemical (EMN - Free Report) saw higher profits on a reported basis in the fourth quarter of 2016, aided by its cost management actions and growth of its high-margin products. The chemical maker recorded profit (as reported) of $128 million or 87 cents per share, up from $124 million or 83 cents per share recorded a year ago.
Barring one-time items, earnings were $1.51 per share for the quarter, down from $1.59 per share in the year ago-quarter. Earnings, however, topped the Zacks Consensus Estimate of $1.48.
Revenues fell around 2% year over year to $2,188 million in the quarter, but beat the Zacks Consensus Estimate of $2,151 million. The decline was mainly due to lower prices and reduced Fibers sales volume that more than offset higher sales volume in other segments.
For full-year 2016, the company posted profit of $866 million or $5.84 per share, up from $848 million or $5.66 per share in 2015.
Revenues for the full year fell roughly 7% year over year to $9,008 million.
Segment Review
Revenues from the Additives and Functional Products division went down 2% year over year to $720 million in the reported quarter. The decline was mainly due to lower selling prices as a result of reduced raw material and energy costs.
Revenues from the Advanced Materials unit was flat year over year at $584 million as higher sales volume of premium products offset lower selling prices due to reduced raw material and energy costs.
Chemical Intermediates sales rose 10% to $643 million on the back of higher sales volume of olefin-based and functional amines products.
Fibers segment sales slid 27% to $230 million due to reduced sales volume and lower selling prices, in particular, for acetate tow.
Financials
Eastman Chemical ended 2016 with cash and cash equivalents of $181 million, down roughly 38% year over year. Total debt fell roughly 6% year over year to $6.6 billion. Eastman Chemical generated operating cash flows of $1.4 billion for 2016. The company returned $417 million to shareholders through $272 million of dividends and $145 million of share repurchases in 2016.
Outlook
Moving ahead, Eastman Chemical said that it should gain from its strong portfolio of specialty businesses and growth of its high-value specialty products amid an uncertain global operating environment. The company sees adjusted earnings per share growth for 2017 to be 8%-12%.
Eastman Chemical has outperformed the Zacks categorized Chemicals-Diversified industry over the past three months. The company’s shares have gained around 19.6% over this period, compared with roughly 13.4% gain recorded by the industry.
Eastman Chemical is a Zacks Rank #3 (Hold) stock.
Stocks to Consider
Better-ranked companies in the chemical space include BASF SE (BASFY - Free Report) , Methanex Corporation (MEOH - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BASF has an expected long-term growth of 7.7%.
Methanex has an expected long-term growth of 15%.
Kronos has an expected long-term growth of 5%.
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Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Eastman Chemical (EMN - Free Report) saw higher profits on a reported basis in the fourth quarter of 2016, aided by its cost management actions and growth of its high-margin products. The chemical maker recorded profit (as reported) of $128 million or 87 cents per share, up from $124 million or 83 cents per share recorded a year ago.
Barring one-time items, earnings were $1.51 per share for the quarter, down from $1.59 per share in the year ago-quarter. Earnings, however, topped the Zacks Consensus Estimate of $1.48.
Revenues fell around 2% year over year to $2,188 million in the quarter, but beat the Zacks Consensus Estimate of $2,151 million. The decline was mainly due to lower prices and reduced Fibers sales volume that more than offset higher sales volume in other segments.
For full-year 2016, the company posted profit of $866 million or $5.84 per share, up from $848 million or $5.66 per share in 2015.
Revenues for the full year fell roughly 7% year over year to $9,008 million.
Segment Review
Revenues from the Additives and Functional Products division went down 2% year over year to $720 million in the reported quarter. The decline was mainly due to lower selling prices as a result of reduced raw material and energy costs.
Revenues from the Advanced Materials unit was flat year over year at $584 million as higher sales volume of premium products offset lower selling prices due to reduced raw material and energy costs.
Chemical Intermediates sales rose 10% to $643 million on the back of higher sales volume of olefin-based and functional amines products.
Fibers segment sales slid 27% to $230 million due to reduced sales volume and lower selling prices, in particular, for acetate tow.
Financials
Eastman Chemical ended 2016 with cash and cash equivalents of $181 million, down roughly 38% year over year. Total debt fell roughly 6% year over year to $6.6 billion. Eastman Chemical generated operating cash flows of $1.4 billion for 2016. The company returned $417 million to shareholders through $272 million of dividends and $145 million of share repurchases in 2016.
Outlook
Moving ahead, Eastman Chemical said that it should gain from its strong portfolio of specialty businesses and growth of its high-value specialty products amid an uncertain global operating environment. The company sees adjusted earnings per share growth for 2017 to be 8%-12%.
Eastman Chemical has outperformed the Zacks categorized Chemicals-Diversified industry over the past three months. The company’s shares have gained around 19.6% over this period, compared with roughly 13.4% gain recorded by the industry.
Eastman Chemical is a Zacks Rank #3 (Hold) stock.
Stocks to Consider
Better-ranked companies in the chemical space include BASF SE (BASFY - Free Report) , Methanex Corporation (MEOH - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BASF has an expected long-term growth of 7.7%.
Methanex has an expected long-term growth of 15%.
Kronos has an expected long-term growth of 5%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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