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The company surpassed Zacks Consensus Estimate for earnings in three of the last four quarters while missing it once. It delivered a trailing four-quarter earnings surprise of around 2.99% on average. It pulled off an earnings surprise of 33.6% in the last reported quarter.
Eastman Chemical is expected to have benefited from its cost-cutting and productivity measures, as well as its growth model, driven by innovation, despite facing challenges from consumer de-stocking and unfavorable currency fluctuations.
The stock has lost 7.4% in the past year against the industry’s rise of 10.9%.
Image Source: Zacks Investment Research
What Do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,557 million, which implies a decline of 8.2% from the year-ago reported number.
Our estimate for EMN’s Additives and Functional Products division’s revenues is pegged at $773.9 million, suggesting a fall of 16.3% year over year. The same for the Advanced Materials unit’s revenues is $786.4 million, indicating a decline of 7.1%.
Our estimate for Eastman’s Chemical Intermediates segment’s revenues is pegged at $682.3 million, suggesting a decline of 20.8%. The same for Fiber Segment stands at $327.3 million, indicating an increase of 35.3% year over year.
Some Factors to Watch
The company is expected to have benefited from lower operating costs from its operational transformation program in the second quarter. It is on track to cut expenses in 2023 by a total of $200 million, net of inflation, in manufacturing, supply chain and non-manufacturing.
The company’s performance is likely to have gained from efforts to generate new business revenues from its innovative growth model. Its innovation and market development initiatives are expected to have supported sales volumes in the quarter.
However, Eastman Chemical's performance might have been hurt by the lingering effects of client inventory de-stocking. In the first quarter of 2023, the company observed customer de-stocking in its end markets for consumer durables, building & construction, water treatment, and personal care. De-stocking is expected to have had an effect on the company's top line in the second quarter. In the second quarter, the company anticipates further de-stocking in the building and construction, consumer durables and consumables segments.
The company's bottom line is likely to have been adversely impacted by higher pension costs. It is also expected to have faced headwinds from unfavorable foreign currency translation due to a stronger dollar.
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 -1.78%. This is because the Most Accurate Estimate is currently pegged at $1.92 while the Zacks Consensus Estimate stands at $1.95. 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.
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:
The Zacks Consensus Estimate for earnings for ECL for the second quarter is pegged at $1.21.
Livent Corporation , scheduled to release earnings on Aug 3, has an Earnings ESP of +3.58% and carries a Zacks Rank #1.
The consensus estimate for LTHM’s earnings for the second quarter is currently pegged at 45 cents.
U.S. Steel Corporation (X - Free Report) , which is scheduled to release earnings on Jul 27, has an Earnings ESP of +0.31% and carries a Zacks Rank #2.
The consensus estimate for X’s earnings for the second quarter is currently pegged at $1.86.
Image: Bigstock
Eastman Chemical (EMN) to Post Q2 Earnings: What's in Store?
Eastman Chemical Company (EMN - Free Report) is scheduled to release second-quarter 2023 results after the closing bell on Jul 27.
The company surpassed Zacks Consensus Estimate for earnings in three of the last four quarters while missing it once. It delivered a trailing four-quarter earnings surprise of around 2.99% on average. It pulled off an earnings surprise of 33.6% in the last reported quarter.
Eastman Chemical is expected to have benefited from its cost-cutting and productivity measures, as well as its growth model, driven by innovation, despite facing challenges from consumer de-stocking and unfavorable currency fluctuations.
The stock has lost 7.4% in the past year against the industry’s rise of 10.9%.
Image Source: Zacks Investment Research
What Do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,557 million, which implies a decline of 8.2% from the year-ago reported number.
Our estimate for EMN’s Additives and Functional Products division’s revenues is pegged at $773.9 million, suggesting a fall of 16.3% year over year. The same for the Advanced Materials unit’s revenues is $786.4 million, indicating a decline of 7.1%.
Our estimate for Eastman’s Chemical Intermediates segment’s revenues is pegged at $682.3 million, suggesting a decline of 20.8%. The same for Fiber Segment stands at $327.3 million, indicating an increase of 35.3% year over year.
Some Factors to Watch
The company is expected to have benefited from lower operating costs from its operational transformation program in the second quarter. It is on track to cut expenses in 2023 by a total of $200 million, net of inflation, in manufacturing, supply chain and non-manufacturing.
The company’s performance is likely to have gained from efforts to generate new business revenues from its innovative growth model. Its innovation and market development initiatives are expected to have supported sales volumes in the quarter.
However, Eastman Chemical's performance might have been hurt by the lingering effects of client inventory de-stocking. In the first quarter of 2023, the company observed customer de-stocking in its end markets for consumer durables, building & construction, water treatment, and personal care. De-stocking is expected to have had an effect on the company's top line in the second quarter. In the second quarter, the company anticipates further de-stocking in the building and construction, consumer durables and consumables segments.
The company's bottom line is likely to have been adversely impacted by higher pension costs. It is also expected to have faced headwinds from unfavorable foreign currency translation due to a stronger dollar.
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 -1.78%. This is because the Most Accurate Estimate is currently pegged at $1.92 while the Zacks Consensus Estimate stands at $1.95. 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.
Eastman Chemical Company Price and EPS Surprise
Eastman Chemical Company price-eps-surprise | Eastman Chemical Company Quote
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:
Ecolab Inc. (ECL - Free Report) , slated to release earnings on Aug 1, has an Earnings ESP of +0.50% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for earnings for ECL for the second quarter is pegged at $1.21.
Livent Corporation , scheduled to release earnings on Aug 3, has an Earnings ESP of +3.58% and carries a Zacks Rank #1.
The consensus estimate for LTHM’s earnings for the second quarter is currently pegged at 45 cents.
U.S. Steel Corporation (X - Free Report) , which is scheduled to release earnings on Jul 27, has an Earnings ESP of +0.31% and carries a Zacks Rank #2.
The consensus estimate for X’s earnings for the second quarter is currently pegged at $1.86.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.