Eastman Chemical Company
’s (EMN - Free Report
) board announced a quarterly cash dividend of 56 cents per common share, a 10% increase from the prior payout of 51 cents. The dividend is payable on Jan 5, 2018, to shareholders of record as of Dec 18, 2017.
This marks the eighth straight year for which the chemical maker has raised its dividend as part of its commitments to return cash to shareholders.
Eastman Chemical remains focused on boosting shareholder returns. The company generated operating cash flows of $528 million during the third quarter and returned $100 million to shareholders through share repurchases in the quarter. It also returned around $498 million (including $223 million in dividends) to its shareholders during first nine months of 2017.
Eastman Chemical has underperformed the industry
it belongs to over a year. The company’s shares have moved up 18.5% over this period, compared with roughly 20.1% gain recorded by the industry.
The company expects to drive growth on the back of innovation and high margin products amid an uncertain global business environment. Eastman Chemical expects adjusted earnings per share growth in 2017 to be toward the top end of the earlier projected range of 10-12% year over year, excluding the financial impact of the Kingsport operational incident.
The company’s Kingsport coal gasification area suffered an operational incident on Oct 4. However, there were no reports of any adverse impact on the environment or on human health. The company noted that all areas of the manufacturing facility have resumed operations with the exception of coal gasification operations.
Though Eastman Chemical is still assessing the financial impact of the incident, it is expected to reduce operating earnings to $50-100 million. The company expects costs associated with the incident to be around $100 million in the fourth quarter.
Eastman Chemical remains focused on cost-cutting and productivity actions. The company should also gain from its strategic acquisitions. It also remains committed to reduce debt.
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