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Eastman Chemical (EMN) Q2 Earnings Lag, Sales Top Estimates
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Eastman Chemical Company (EMN - Free Report) logged profit of $27 million or 20 cents per share for the second quarter of 2020, down from the year-ago profit of $258 million or $1.85 per share.
Barring one-time items, earnings were 85 cents per share for the quarter, down from $1.99 in the year ago-quarter. Earnings also missed the Zacks Consensus Estimate of $1.03.
Revenues dropped around 19% year over year to $1,924 million in the quarter, hurt by lower sales volumes resulting from the impacts of the coronavirus pandemic and lower selling prices due to reduced raw material prices. The top line, however, surpassed the Zacks Consensus Estimate of $1,774.8 million.
The company saw lower volumes in transportation, building & construction, consumer durables and textiles end markets, partly offset by gains in consumables, personal care & wellness, medical and agriculture.
Eastman Chemical Company Price, Consensus and EPS Surprise
Revenues from the Additives and Functional Products division fell 17% year over year to $685 million for the reported quarter, hurt by lower volumes and selling prices as well as less favorable product mix. Volumes fell in coatings additives, tire additives and aviation fluids products sold in transportation end markets.
Revenues from the Advanced Materials unit slipped 19% year over year to $567 million. The decline can be attributed to lower volumes and less favorable product mix.
Chemical Intermediates sales dropped 27% year over year to $461 million, hurt by lower selling prices and sales volumes. Lower raw material prices impacted selling prices. Volumes fell partly due to the unfavorable impacts of coronavirus on demand.
Fibers segment sales edged down 1% year over year to $211 million. Acetate tow sales volumes rose modestly in the quarter. Demand for textiles products was affected by the pandemic.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $704 million, a nearly four fold year-over-year increase. Net debt at the end of the quarter was $5,429 million, down around 12% year over year.
Eastman Chemical generated cash from operating activities of $436 million and free cash flow of $339 million during the reported quarter.
The company also returned $119 million to its shareholders through share repurchases and dividends during the quarter.
Outlook
Eastman Chemical did not provide earnings guidance for full-year 2020 due to higher level of uncertainties related to the impacts of coronavirus. The company noted that it is on track to deliver roughly $150 million of cost savings for 2020 in response to the pandemic. It also expects to generate more than $1 billion of free cash flow this year.
Price Performance
Eastman Chemical’s shares have gained 10.6% over a year, outperforming the 1.3% decline of the industry it belongs to.
Zacks Rank & Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Barrick Gold Corporation (GOLD - Free Report) , Equinox Gold Corp. (EQX - Free Report) and Eldorado Gold Corporation (EGO - Free Report) .
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The company’s shares have rallied roughly 103% in a year. It currently carries a Zacks Rank #2.
Eldorado Gold has an expected earnings growth rate of 2,025% for the current year. The company’s shares have shot up around 40% in the past year. It presently carries a Zacks Rank #2.
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Eastman Chemical (EMN) Q2 Earnings Lag, Sales Top Estimates
Eastman Chemical Company (EMN - Free Report) logged profit of $27 million or 20 cents per share for the second quarter of 2020, down from the year-ago profit of $258 million or $1.85 per share.
Barring one-time items, earnings were 85 cents per share for the quarter, down from $1.99 in the year ago-quarter. Earnings also missed the Zacks Consensus Estimate of $1.03.
Revenues dropped around 19% year over year to $1,924 million in the quarter, hurt by lower sales volumes resulting from the impacts of the coronavirus pandemic and lower selling prices due to reduced raw material prices. The top line, however, surpassed the Zacks Consensus Estimate of $1,774.8 million.
The company saw lower volumes in transportation, building & construction, consumer durables and textiles end markets, partly offset by gains in consumables, personal care & wellness, medical and agriculture.
Eastman Chemical Company Price, Consensus and EPS Surprise
Eastman Chemical Company price-consensus-eps-surprise-chart | Eastman Chemical Company Quote
Segment Review
Revenues from the Additives and Functional Products division fell 17% year over year to $685 million for the reported quarter, hurt by lower volumes and selling prices as well as less favorable product mix. Volumes fell in coatings additives, tire additives and aviation fluids products sold in transportation end markets.
Revenues from the Advanced Materials unit slipped 19% year over year to $567 million. The decline can be attributed to lower volumes and less favorable product mix.
Chemical Intermediates sales dropped 27% year over year to $461 million, hurt by lower selling prices and sales volumes. Lower raw material prices impacted selling prices. Volumes fell partly due to the unfavorable impacts of coronavirus on demand.
Fibers segment sales edged down 1% year over year to $211 million. Acetate tow sales volumes rose modestly in the quarter. Demand for textiles products was affected by the pandemic.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $704 million, a nearly four fold year-over-year increase. Net debt at the end of the quarter was $5,429 million, down around 12% year over year.
Eastman Chemical generated cash from operating activities of $436 million and free cash flow of $339 million during the reported quarter.
The company also returned $119 million to its shareholders through share repurchases and dividends during the quarter.
Outlook
Eastman Chemical did not provide earnings guidance for full-year 2020 due to higher level of uncertainties related to the impacts of coronavirus. The company noted that it is on track to deliver roughly $150 million of cost savings for 2020 in response to the pandemic. It also expects to generate more than $1 billion of free cash flow this year.
Price Performance
Eastman Chemical’s shares have gained 10.6% over a year, outperforming the 1.3% decline of the industry it belongs to.
Zacks Rank & Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Barrick Gold Corporation (GOLD - Free Report) , Equinox Gold Corp. (EQX - Free Report) and Eldorado Gold Corporation (EGO - Free Report) .
Barrick Gold has a projected earnings growth rate of 72.6% for the current year. The company’s shares have gained around 63% in a year. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The company’s shares have rallied roughly 103% in a year. It currently carries a Zacks Rank #2.
Eldorado Gold has an expected earnings growth rate of 2,025% for the current year. The company’s shares have shot up around 40% in the past year. It presently carries a Zacks Rank #2.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>