We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Eastman Chemical (EMN) Q3 Earnings Miss, Sales Surpass Estimates
Read MoreHide Full Article
Eastman Chemical Company (EMN - Free Report) recorded a profit of $351 million or $2.57 per share for the third quarter of 2021, up from a profit of $161 million or $1.18 in the year-ago quarter.
Barring one-time items, earnings were $2.46 per share for the quarter, up from $1.57 in the year-ago quarter. Earnings trailed the Zacks Consensus Estimate of $2.47.
Revenues rose around 28% year over year to $2,720 million in the quarter. The figure also surpassed the Zacks Consensus Estimate of $2,637.6 million. The top line was driven by higher selling prices and improved volume/mix.
The company gained from strong demand across most end markets, innovation, price increases, operational execution and cost-saving actions amid headwinds from logistics constraints and higher raw material and energy costs in the reported quarter.
Eastman Chemical Company Price, Consensus and EPS Surprise
Revenues from the Additives and Functional Products division went up 34% year over year to $997 million for the reported quarter, aided by 16% volume/mix growth and an 18% increase in selling prices. Strong end-market demand contributed to a favorable volume/mix while selling prices were higher primarily due to increased raw material, energy and distribution prices.
Revenues from the Advanced Materials unit rose 15% year over year to $770 million in the previous-year quarter. The upside was driven by 10% volume/mix growth due to solid demand in major markets including medical, consumer durables and electronics. Selling prices also rose 4% on increased raw material, energy and distribution prices, especially for specialty plastics. However, the segment was affected by lower automotive production due to automotive OEM component shortages.
Chemical Intermediates sales climbed 44% year over year to $731 million, led by a 46% increase in selling prices due to higher raw material, energy and distribution prices, strong demand and tight commodity markets. Volume fell mainly due to reduced functional amines sales resulting from the seasonality in the agriculture market.
Fibers segment sales went up 8% year over year to $222 million, on the back of 7% volume/mix growth and 1% higher selling prices. Higher textiles sales volumes were driven by market development initiatives and the sustained recovery of the textiles end market.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $717 million, a roughly 10% year-over-year increase. Net debt at the end of the quarter was $4,771 million, a roughly 9% decline year over year.
Eastman Chemical generated cash from operating activities of $1.19 billion and a free cash flow of $874 million in the first nine months of 2021. The company also returned $572 million to its shareholders through dividends and share repurchases during the period.
Guidance
Eastman Chemical said that it is seeing sustained logistics challenges, supply-chain issues and higher raw material and energy costs as it enters the fourth quarter. It is implementing price hike actions across its specialty product lines to offset these higher costs.
It expects adjusted earnings per share of $8.80-$9.00 for 2021. It also anticipates free cash flow to approach $1.1 billion for the year.
Price Performance
Eastman Chemical’s shares have rallied 34.4% over a year, outperforming the 26.2% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Currently, Eastman carries a Zacks Rank #3 (Hold).
Image: Bigstock
Eastman Chemical (EMN) Q3 Earnings Miss, Sales Surpass Estimates
Eastman Chemical Company (EMN - Free Report) recorded a profit of $351 million or $2.57 per share for the third quarter of 2021, up from a profit of $161 million or $1.18 in the year-ago quarter.
Barring one-time items, earnings were $2.46 per share for the quarter, up from $1.57 in the year-ago quarter. Earnings trailed the Zacks Consensus Estimate of $2.47.
Revenues rose around 28% year over year to $2,720 million in the quarter. The figure also surpassed the Zacks Consensus Estimate of $2,637.6 million. The top line was driven by higher selling prices and improved volume/mix.
The company gained from strong demand across most end markets, innovation, price increases, operational execution and cost-saving actions amid headwinds from logistics constraints and higher raw material and energy costs in the reported quarter.
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 went up 34% year over year to $997 million for the reported quarter, aided by 16% volume/mix growth and an 18% increase in selling prices. Strong end-market demand contributed to a favorable volume/mix while selling prices were higher primarily due to increased raw material, energy and distribution prices.
Revenues from the Advanced Materials unit rose 15% year over year to $770 million in the previous-year quarter. The upside was driven by 10% volume/mix growth due to solid demand in major markets including medical, consumer durables and electronics. Selling prices also rose 4% on increased raw material, energy and distribution prices, especially for specialty plastics. However, the segment was affected by lower automotive production due to automotive OEM component shortages.
Chemical Intermediates sales climbed 44% year over year to $731 million, led by a 46% increase in selling prices due to higher raw material, energy and distribution prices, strong demand and tight commodity markets. Volume fell mainly due to reduced functional amines sales resulting from the seasonality in the agriculture market.
Fibers segment sales went up 8% year over year to $222 million, on the back of 7% volume/mix growth and 1% higher selling prices. Higher textiles sales volumes were driven by market development initiatives and the sustained recovery of the textiles end market.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $717 million, a roughly 10% year-over-year increase. Net debt at the end of the quarter was $4,771 million, a roughly 9% decline year over year.
Eastman Chemical generated cash from operating activities of $1.19 billion and a free cash flow of $874 million in the first nine months of 2021. The company also returned $572 million to its shareholders through dividends and share repurchases during the period.
Guidance
Eastman Chemical said that it is seeing sustained logistics challenges, supply-chain issues and higher raw material and energy costs as it enters the fourth quarter. It is implementing price hike actions across its specialty product lines to offset these higher costs.
It expects adjusted earnings per share of $8.80-$9.00 for 2021. It also anticipates free cash flow to approach $1.1 billion for the year.
Price Performance
Eastman Chemical’s shares have rallied 34.4% over a year, outperforming the 26.2% rise of the industry.
Zacks Rank & Key Picks
Currently, Eastman carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Methanex Corporation (MEOH - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien has an expected earnings growth rate of 180% for the current year. The stock has also rallied around 71% over a year.
Methanex has a projected earnings growth rate of 429% for the current year. The company’s shares have shot up around 49% in a year.
Steel Dynamics has a projected earnings growth rate of 477.5% for the current year. The company’s shares have surged around 107% in a year.