Eastman Chemical Company ( EMN Quick Quote EMN - Free Report) is set to release third-quarter 2021 results after the closing bell on Oct 28. The company’s earnings are likely to have benefited from cost-management actions and revenues from innovation. However, it is likely to have faced challenges associated with supply and logistics in the third quarter.
Eastman Chemical beat the Zacks Consensus Estimate for earnings in all the last four quarters. The company has a trailing-four quarter earnings surprise of 8.4%, on average. The company posted an earnings surprise of 6% in the last reported quarter.
Shares of Eastman Chemical are up 32% in the past year compared with a 27.4% rise of its
industry. Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for Eastman Chemical’s third-quarter revenues is currently pinned at $2,638 million, which indicates a 24.3% year-over-year increase.
The Zacks Consensus Estimate for the Eastman Chemical’s Additives and Functional Products division revenues is pegged at $911 million, suggesting a 22.8% increase year over year. The consensus estimate for Advanced Materials unit’s revenues is at $779 million, indicating an increase of 16.6% year over year.
The Zacks Consensus Estimate for the Chemical Intermediates segment’s revenues is at $730 million, which indicates a 44.3% rise from the year-ago quarter’s levels. The same for the Fibers segment is pegged at $214 million, suggesting a 3.9% year-over-year increase.
Factors to Watch For
Benefits of cost actions are likely to get reflected in the company’s third-quarter performance. Eastman reduced costs by around $150 million in 2020. These initiatives are likely to have contributed to earnings per share in the September quarter. The company might have benefited from lower operating costs from its operational transformation program in the third quarter.
The company is also expected to have gained from generating new business revenues from innovation. The company expects $600 million of new business revenues from innovation in 2021. Eastman Chemical is likely to have benefited from strategic acquisitions and end-market recovery.
However, Eastman Chemical is likely to have faced headwinds from higher raw material, energy, and distribution costs in some of its products. Headwinds associated with supply and logistics are likely to have impacted third-quarter performance.
The slowdown in automotive production due to the semiconductor shortage is likely to have affected the company in the quarter to be reported. The chip shortage is expected to have affected demand in the automotive market in the third quarter.
Our proven model does not conclusively predict an earnings beat for Eastman Chemical this season. The combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. Earnings ESP: Earnings ESP for Eastman Chemical is -0.76%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $2.47. 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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
LyondellBasell Industries N.V. ( LYB Quick Quote LYB - Free Report) , scheduled to release earnings on Oct 29, has an Earnings ESP of +0.61% and carries a Zacks Rank #3. The Chemours Company ( CC Quick Quote CC - Free Report) , scheduled to release earnings on Nov 4, has an Earnings ESP of +5.70% and carries a Zacks Rank #2. Albemarle Corporation ( ALB Quick Quote ALB - Free Report) , scheduled to release earnings on Nov 3, has an Earnings ESP of +8.73% and carries a Zacks Rank #3.