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Eastman Chemical (EMN) Gains on Cost Cuts and Innovation
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Eastman Chemical Company (EMN - Free Report) is gaining from its innovation-driven growth model, operational execution and cost-management actions amid certain headwinds, including soft demand and consumer de-stocking.
Eastman Chemical, which is among the prominent players in the chemical space along with Celanese Corporation (CE - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) and The Chemours Company (CC - Free Report) , is expected to benefit from lower operating costs from its operational transformation program.
EMN was able to offset $1.3 billion in inflation from higher raw material, energy and distribution costs through price increases in 2022. It expects to reduce manufacturing, supply chain and non-manufacturing costs by more than $200 million for full-year 2023, net of inflation. Pricing initiatives and lower raw material and energy costs are also expected to support the company’s bottom line.
Moreover, Eastman's goal is to increase new business revenues by utilizing its innovation-driven growth strategy. Due to the company's competence in specialty products, it generated around $550 million in new business revenues from innovation in 2022. Sales volumes are expected to be supported by the innovation and market development initiatives.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation. Its operating cash flow more than doubled year over year to $514 million in the third quarter of 2023. The company returned $94 million to shareholders in the third quarter through dividends and share repurchases. Furthermore, it expects to deliver $1.4 billion in operating cash flow for full-year 2023. The company, last month, also raised its dividend for the 14th consecutive year.
EMN, in its third-quarter call, stated that it is seeing muted demand in the fourth quarter as customers are cautious in the prevailing challenging environment. In addition, it anticipates regular seasonality in key end markets, including building and construction, consumer durables and performance films for automotive applications. It expects earnings per share for 2023 to be between $6.30 and $6.50. EMN is scheduled to release fourth-quarter earnings on Feb 1.
Another prominent chemical maker, Celanese expects adjusted earnings in the range of $2.10-$2.50 per share for the fourth quarter. For the full year, Celanese anticipates adjusted earnings at the bottom end of the guidance range of $9-$10. CE is slated to release fourth-quarter earnings on Feb 20.
Air Products, in its fourth-quarter fiscal 2023 call, said that it expects fiscal 2024 adjusted earnings per share of $12.80-$13.10, indicating 13% growth from the prior year’s adjusted earnings at the midpoint. For the first quarter of fiscal 2024, the company expects adjusted earnings per share in the range of $2.90-$3.05, suggesting a rise of 13% at the midpoint from the year-ago quarter. APD is slated to release fiscal first-quarter earnings on Feb 5.
Chemours sees adjusted EBITDA for 2023 to be between $1.025 billion and $1.075 billion. CC is scheduled to release fourth-quarter earnings on Feb 14.
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Eastman Chemical (EMN) Gains on Cost Cuts and Innovation
Eastman Chemical Company (EMN - Free Report) is gaining from its innovation-driven growth model, operational execution and cost-management actions amid certain headwinds, including soft demand and consumer de-stocking.
Eastman Chemical, which is among the prominent players in the chemical space along with Celanese Corporation (CE - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) and The Chemours Company (CC - Free Report) , is expected to benefit from lower operating costs from its operational transformation program.
EMN was able to offset $1.3 billion in inflation from higher raw material, energy and distribution costs through price increases in 2022. It expects to reduce manufacturing, supply chain and non-manufacturing costs by more than $200 million for full-year 2023, net of inflation. Pricing initiatives and lower raw material and energy costs are also expected to support the company’s bottom line.
Moreover, Eastman's goal is to increase new business revenues by utilizing its innovation-driven growth strategy. Due to the company's competence in specialty products, it generated around $550 million in new business revenues from innovation in 2022. Sales volumes are expected to be supported by the innovation and market development initiatives.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation. Its operating cash flow more than doubled year over year to $514 million in the third quarter of 2023. The company returned $94 million to shareholders in the third quarter through dividends and share repurchases. Furthermore, it expects to deliver $1.4 billion in operating cash flow for full-year 2023. The company, last month, also raised its dividend for the 14th consecutive year.
EMN, in its third-quarter call, stated that it is seeing muted demand in the fourth quarter as customers are cautious in the prevailing challenging environment. In addition, it anticipates regular seasonality in key end markets, including building and construction, consumer durables and performance films for automotive applications. It expects earnings per share for 2023 to be between $6.30 and $6.50. EMN is scheduled to release fourth-quarter earnings on Feb 1.
Another prominent chemical maker, Celanese expects adjusted earnings in the range of $2.10-$2.50 per share for the fourth quarter. For the full year, Celanese anticipates adjusted earnings at the bottom end of the guidance range of $9-$10. CE is slated to release fourth-quarter earnings on Feb 20.
Air Products, in its fourth-quarter fiscal 2023 call, said that it expects fiscal 2024 adjusted earnings per share of $12.80-$13.10, indicating 13% growth from the prior year’s adjusted earnings at the midpoint. For the first quarter of fiscal 2024, the company expects adjusted earnings per share in the range of $2.90-$3.05, suggesting a rise of 13% at the midpoint from the year-ago quarter. APD is slated to release fiscal first-quarter earnings on Feb 5.
Chemours sees adjusted EBITDA for 2023 to be between $1.025 billion and $1.075 billion. CC is scheduled to release fourth-quarter earnings on Feb 14.