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What's in Store for Eastman Chemical's (EMN) Q4 Earnings?

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Eastman Chemical Company (EMN - Free Report) is set to release fourth-quarter 2021 results after the closing bell on Jan 27. Benefits of cost actions and innovation are likely to get reflected in the company’s fourth-quarter performance. However, it is likely to have faced challenges associated with supply and logistics issues and higher raw material costs in the quarter.

Eastman Chemical beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. The company has a trailing-four quarter earnings surprise of 5.3%, on average. The company posted a negative earnings surprise of 0.4% in the last reported quarter.

Shares of Eastman Chemical are up 15.4% in the past year compared with an 8.3% rise of its industry.

 

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Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for Eastman Chemical’s fourth-quarter revenues is currently pinned at $2,425 million, which indicates a 10.9% year-over-year increase.

The Zacks Consensus Estimate for the Eastman Chemical’s Additives and Functional Products division revenues is pegged at $794 million, suggesting a 2.7% increase year over year. The consensus estimate for Advanced Materials unit’s revenues is $716 million, indicating an increase of 6.2% year over year.

The Zacks Consensus Estimate for the Chemical Intermediates segment’s revenues is pegged at $639 million, which indicates a 20.3% rise from the year-ago quarter’s levels. The same for the Fibers segment stands at $209 million, flat year over year.

Factors to Watch For

The company’s fourth-quarter earnings are likely to have benefited from cost-management and price hike actions and revenues from innovation. It might have benefited from lower operating costs from its operational transformation program in the December quarter.

The company is also expected to have gained from generating new business revenues from innovation. It remains focused on growing new business revenues leveraging its innovation-driven growth model. Eastman Chemical is also 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-chain and logistics are likely to have impacted fourth-quarter performance.

The slowdown in automotive production due to the semiconductor shortage is also 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.

 

Eastman Chemical Company Price and EPS Surprise

 

Eastman Chemical Company Price and EPS Surprise

Eastman Chemical Company price-eps-surprise | Eastman Chemical Company Quote

 

Zacks Model

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 -1.62%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.89. 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.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

Olin Corporation (OLN - Free Report) , scheduled to release earnings on Jan 27, has an Earnings ESP of +1.95% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Olin's fourth-quarter earnings has been revised 4.1% upward over the past 60 days. The consensus estimate for OLN’s earnings for the quarter is currently pegged at $2.53.

CF Industries Holdings, Inc. (CF - Free Report) , expected to release earnings on Feb 16, has an Earnings ESP of +20.03% and sports a Zacks Rank #3.

The consensus estimate for CF Industries' fourth-quarter earnings has been revised 31.5% upward over the past 60 days. The Zacks Consensus Estimate for CF’s earnings for the quarter stands at $3.05.

Celanese Corporation (CE - Free Report) , scheduled to release earnings on Jan 27, has an Earnings ESP of +2.98% and carries a Zacks Rank #3.

The Zacks Consensus Estimate for Celanese's fourth-quarter earnings has been revised 0.6% upward over the past 60 days. The consensus estimate for CE’s earnings for the quarter is currently pegged at $5.05.



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