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Eastman Chemical (EMN) Gains on Cost Cuts and Innovation
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Eastman Chemical Company (EMN - Free Report) is benefiting from its innovation-driven growth model, operational execution and cost-management actions amid certain headwinds, including soft demand and customer de-stocking.
Eastman Chemical, which is among the prominent players in the chemical space along with Dow Inc. (DOW - Free Report) , Celanese Corporation (CE - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) , is expected to benefit from lower operating costs from its operational transformation program.
EMN is taking actions to keep its manufacturing and administrative costs in control. It achieved cost savings of around $200 million in 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. Its sales volumes are expected to be supported by the innovation and market development initiatives.
The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. The facility is expected to deliver roughly $75 million of incremental EBITDA growth in 2024.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation with an emphasis on debt reduction. It returned $526 million to shareholders in 2023 through dividends and share repurchases. Furthermore, the company delivered around $1.4 billion in operating cash flow in 2023. It also raised its dividend for the 14th consecutive year.
However, the company faces headwinds from weak demand and continued de-stocking in certain markets. It saw soft demand and de-stocking for its consumer durables, building & construction, agriculture, medical and consumables end markets in 2023. Lingering effects from customer inventory de-stocking are expected to adversely impact its performance.
EMN expects continued destocking in medical and agriculture in the first quarter of 2024. The impacts of de-stocking are likely to be felt on the company’s volumes and top line in the quarter. Soft demand in building & construction and consumer durables is also likely to continue over the near term.
Eastman Chemical, in its fourth-quarter call, stated that it expects 2024 earnings per share (EPS) to range between $7.25 and $8.00. It also expects to generate cash from operations of around $1.4 billion in 2024.
Another prominent chemical maker, Dow expects the weakness in industrial and durable goods demand to continue in the first quarter of 2024. DOW it will maintain its commitment to financial and operational discipline as it navigates dynamic market conditions in 2024.
Celanese expects adjusted earnings of $1.75-$2.00 per share for the first quarter of 2024. CE anticipates a significant rise in earnings per share year over year in 2024 due to M&M synergy capture, Clear Lake acetic acid and methanol expansions, lower interest expenses from deleveraging and lower inventory costs.
Air Products, in its first-quarter fiscal 2024 call, said that it now expects fiscal 2024 adjusted EPS of $12.20-$12.50, indicating 6-9% growth from the prior year’s adjusted EPS. For the second quarter of fiscal 2024, the company sees adjusted EPS in the range of $2.60-$2.75.
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Eastman Chemical (EMN) Gains on Cost Cuts and Innovation
Eastman Chemical Company (EMN - Free Report) is benefiting from its innovation-driven growth model, operational execution and cost-management actions amid certain headwinds, including soft demand and customer de-stocking.
Eastman Chemical, which is among the prominent players in the chemical space along with Dow Inc. (DOW - Free Report) , Celanese Corporation (CE - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) , is expected to benefit from lower operating costs from its operational transformation program.
EMN is taking actions to keep its manufacturing and administrative costs in control. It achieved cost savings of around $200 million in 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. Its sales volumes are expected to be supported by the innovation and market development initiatives.
The company is also expected to gain from the revenues and earnings generated by its Kingsport methanolysis facility in 2024. The facility is expected to deliver roughly $75 million of incremental EBITDA growth in 2024.
Eastman Chemical also remains focused on maintaining a disciplined approach to capital allocation with an emphasis on debt reduction. It returned $526 million to shareholders in 2023 through dividends and share repurchases. Furthermore, the company delivered around $1.4 billion in operating cash flow in 2023. It also raised its dividend for the 14th consecutive year.
However, the company faces headwinds from weak demand and continued de-stocking in certain markets. It saw soft demand and de-stocking for its consumer durables, building & construction, agriculture, medical and consumables end markets in 2023. Lingering effects from customer inventory de-stocking are expected to adversely impact its performance.
EMN expects continued destocking in medical and agriculture in the first quarter of 2024. The impacts of de-stocking are likely to be felt on the company’s volumes and top line in the quarter. Soft demand in building & construction and consumer durables is also likely to continue over the near term.
Eastman Chemical, in its fourth-quarter call, stated that it expects 2024 earnings per share (EPS) to range between $7.25 and $8.00. It also expects to generate cash from operations of around $1.4 billion in 2024.
Another prominent chemical maker, Dow expects the weakness in industrial and durable goods demand to continue in the first quarter of 2024. DOW it will maintain its commitment to financial and operational discipline as it navigates dynamic market conditions in 2024.
Celanese expects adjusted earnings of $1.75-$2.00 per share for the first quarter of 2024. CE anticipates a significant rise in earnings per share year over year in 2024 due to M&M synergy capture, Clear Lake acetic acid and methanol expansions, lower interest expenses from deleveraging and lower inventory costs.
Air Products, in its first-quarter fiscal 2024 call, said that it now expects fiscal 2024 adjusted EPS of $12.20-$12.50, indicating 6-9% growth from the prior year’s adjusted EPS. For the second quarter of fiscal 2024, the company sees adjusted EPS in the range of $2.60-$2.75.