Eastman Chemical Company
(EMN - Free Report
) announced plans to expand its copolyester site in Kuantan, Malaysia. The expansion will increase the PETG capacity by roughly 20% and is expected to be completed in the first quarter of 2018.
The company’s latest move is in line to meet the growing demand of copolyester products globally. Additionally, it will provide flexibility to the company’s polymer asset base.
The company’s Kuantan site makes several copolyesters including Eastman Spectar and Eastman Eastar copolyesters.
Eastman Chemical has outperformed the industry
for over a year. The company’s shares have moved up around 24.6% over this period, compared with roughly 17.2% gain recorded by the industry.
Eastman Chemical’s adjusted earnings were $1.98 per share for the second quarter, up from $1.68 in the year ago-quarter. Earnings topped the Zacks Consensus Estimate of $1.89 per share. Revenues rose around 5% year over year to $2,419 million in the quarter, beating the Zacks Consensus Estimate of $2,366 million.
The company expects to drive growth on the back of innovation and high margin products amid an uncertain global business environment. It believes that disciplined capital allocation and aggressive cost management policies may contribute to earnings growth and help to offset challenges in Fibers and ethylene pricing. The company now expects adjusted earnings per share for 2017 to grow 10-12% year over year, up from its earlier view of 8-12%.
Eastman Chemical remains focused on cost-cutting and productivity actions amid a challenging operating environment. The company is also expected to gain from strategic acquisitions. It also remains committed to reduce debt.
However, Eastman continues to face pricing pressure. The company is also exposed to weakness in its Fibers unit and raw material price volatility.
Eastman Chemical Company Price and Consensus