Eastman Chemical Company (EMN - Free Report) saw higher profits in the first quarter of 2018, aided by strong growth in its specialty businesses and cost management actions. The chemical maker recorded profit of $290 million or $2.00 per share, a roughly 4% rise from the year-ago figure of $278 million or $1.89.
Barring one-time items, earnings were $2.23 per share for the quarter, up from $1.83 in the year ago-quarter. Earnings surpassed 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.
Segment Review
Revenues from the Additives and Functional Products division went up 21% year over year to $939 million in the reported quarter. The increase was attributable to higher sales volumes for most product lines, favorable currency swings and increased selling prices.
Revenues from the Advanced Materials unit rose 9% year over year to $693 million on increased sales volume of premium products.
Chemical Intermediates sales rose 9% to $730 million on the back of higher selling prices and improved market conditions.
Fibers segment sales went up 15% to $245 million due to higher sales volume for acetate tow and acetate flake.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $194 million, down roughly 2% year over year. Net debt at the end of the quarter was $6,706 million, essentially flat year over year.
The company returned $100 million to shareholders through share repurchases during the quarter.
Outlook
Eastman Chemical 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.
Price Performance
Eastman Chemical’s shares have rallied 32.8% over the past year, outperforming the 8.3% gain of the industry it belongs to.
Zacks Rank & Stocks to Consider
Eastman Chemical currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Celanese Corporation (CE - Free Report) and Methanex Corporation (MEOH - Free Report) .
Kronos has an expected long-term earnings growth rate of 5% and flaunts a Zacks Rank #1 (Strong Buy). The company’s shares have moved up around 36% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected long-term earnings growth rate of 8.9% and flaunts a Zacks Rank #1. Its shares have gained roughly 26% over a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2. Its shares have roughly 38% over a year.
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Eastman Chemical Company (EMN - Free Report) saw higher profits in the first quarter of 2018, aided by strong growth in its specialty businesses and cost management actions. The chemical maker recorded profit of $290 million or $2.00 per share, a roughly 4% rise from the year-ago figure of $278 million or $1.89.
Barring one-time items, earnings were $2.23 per share for the quarter, up from $1.83 in the year ago-quarter. Earnings surpassed 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.
Segment Review
Revenues from the Additives and Functional Products division went up 21% year over year to $939 million in the reported quarter. The increase was attributable to higher sales volumes for most product lines, favorable currency swings and increased selling prices.
Revenues from the Advanced Materials unit rose 9% year over year to $693 million on increased sales volume of premium products.
Chemical Intermediates sales rose 9% to $730 million on the back of higher selling prices and improved market conditions.
Fibers segment sales went up 15% to $245 million due to higher sales volume for acetate tow and acetate flake.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $194 million, down roughly 2% year over year. Net debt at the end of the quarter was $6,706 million, essentially flat year over year.
The company returned $100 million to shareholders through share repurchases during the quarter.
Outlook
Eastman Chemical 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.
Price Performance
Eastman Chemical’s shares have rallied 32.8% over the past year, outperforming the 8.3% gain of the industry it belongs to.
Zacks Rank & Stocks to Consider
Eastman Chemical currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Celanese Corporation (CE - Free Report) and Methanex Corporation (MEOH - Free Report) .
Kronos has an expected long-term earnings growth rate of 5% and flaunts a Zacks Rank #1 (Strong Buy). The company’s shares have moved up around 36% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected long-term earnings growth rate of 8.9% and flaunts a Zacks Rank #1. Its shares have gained roughly 26% over a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2. Its shares have roughly 38% over a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
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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