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EMN Q1 Earnings Beat Estimates, Revenues Miss on Lower Y/Y Volume
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Key Takeaways
EMN posted Q1 adjusted EPS of $1.09, beating estimates, while sales fell 4.9% to $2.18B.
Eastman sees Middle East disruption boosting 2026 earnings, especially in Chemical Intermediates.
EMN guides Q2 adjusted EPS of $1.70-$1.90 as maintenance costs offset volume gains.
Eastman Chemical Company (EMN - Free Report) reported adjusted earnings of $1.09 per share for the first quarter of 2026, down 42.9% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $1.07.
Sales were $2,177 million, down 4.9% year over year and missing the consensus estimate of $2,209.4 million by 1.5%. Results reflected a strong sequential improvement in sales volume/mix in specialty businesses, even as demand remained pressured across several end markets, but year-over-year lower volume/mix and lower selling prices drove the sales decline in the quarter.
It was partly offset by a favorable foreign-currency impact. The continued customer inventory destocking in acetate tow and weak underlying demand in consumer discretionary end markets were key drags on volume/mix.
On profitability, a disciplined price-cost management alongside actions to secure critical raw materials and adjust pricing amid the disruption tied to the Middle East conflict. Eastman is also implementing roughly $500 million of price increases across its portfolio to offset raw material and distribution inflation.
Eastman Chemical Company Price, Consensus and EPS Surprise
Advanced Materials revenues were $715 million compared with $719 million a year ago. The figure beat our estimate of $708.2 million. Sales volume/mix was unchanged, as strong growth in specialty plastics was offset by weakness in performance films due to a soft automotive aftermarket, while lower selling prices reflected lower raw material costs.
Additives & Functional Products generated revenues of $739 million compared with $733 million in the prior-year quarter. The figure outpaced our estimate of $721.3 million. Eastman cited modest stability in sales volume/mix alongside lower selling prices and a favorable foreign-currency lift, with demand softness tied to building and construction weighing on coatings additives.
Chemical Intermediates revenues declined to $495 million from $545 million a year ago. The figure was above our estimate of $476.6 million. Management said January and February reflected weak commodity market conditions that pressured both pricing and volume/mix, while March saw tightening conditions for certain olefin and derivative products as the Middle East conflict began to influence market dynamics.
Fibers revenues fell to $225 million from $288 million in the year-ago quarter. The figure lagged our estimate of $270 million. Eastman pointed to continued acetate tow destocking and reduced customer shipments tied to the Middle East conflict, along with weakness in textiles end-market demand and modestly lower contract pricing.
EMN Financials
Eastman ended the first quarter with cash and cash equivalents of $665 million, up from $418 million at the end of the prior-year period. Cash and cash equivalents rose $99 million sequentially from $566 million at the beginning of the quarter.
Net debt was $4,555 million as of March 31, 2026, compared with $4,221 million at the end of 2025. Total borrowings were $5,220 million at quarter end.
Cash used in operating activities was $137 million in the first quarter versus $167 million in the prior-year quarter, with inventory increasing ahead of large, planned shutdowns in the second quarter. Eastman returned $96 million to stockholders through dividends during the quarter and reiterated that capital allocation priorities include dividends, capital spending and share repurchases while maintaining an investment-grade balance sheet.
Eastman Guidance
For full-year 2026, the Middle East conflict is a significant disruption that is likely to create net upside to earnings, with the most visible change versus January occurring in Chemical Intermediates as tightening market conditions improve margins, EMN noted. In specialties, Eastman expects pricing actions to offset higher raw material and distribution costs and also sees potential volume/mix upside tied to its U.S. asset footprint and security of supply.
Eastman is maintaining its cost-reduction target of $125 million to $150 million, net of inflation, and expects tailwinds from lower shutdown expense, improved utilization and favorable foreign-currency effects. Capital expenditures are expected to be approximately $400 million in 2026.
Looking to the second quarter, Eastman expects tailwinds from improved sales volume/mix in Advanced Materials and, to a lesser extent, Additives & Functional Products, along with substantial spread improvement in Chemical Intermediates. Headwinds include approximately $45 million of costs from planned maintenance, and the company projects second-quarter adjusted earnings of $1.70 to $1.90 per share.
Eastman said it is making solid progress in the commercial ramp-up of its Kingsport methanolysis facility and remains on track with revenue acceleration and about $30 million of incremental earnings tied to the asset. With consumer discretionary end markets still uneven and automotive expected to decline by low single digits versus 2025, the company’s near-term execution relies on holding price-cost discipline, managing planned maintenance impacts and capturing any supply-driven opportunities created by the ongoing industry disruption.
EMN’s Price Performance
EMN’s shares are down 2.8% over a year compared with the 16.6% growth recorded by the Zacks Chemicals Diversified industry.
Image Source: Zacks Investment Research
EMN’s Zacks Rank & Key Picks
EMN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. (CF - Free Report) , Compass Minerals International, Inc. (CMP - Free Report) and Aris Mining Corporation (ARIS - Free Report) .
CF Industries is slated to report first-quarter 2026 results on May 6. The Zacks Consensus Estimate for earnings is pegged at $2.35 per share, indicating 27.03% year-over-year growth. CF sports a Zacks Rank #1 (Strong Buy) at present. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Compass Mineral is slated to report second-quarter fiscal 2026 results on May 6. The consensus estimate for CMP’s earnings per share is pegged at 66 cents. CMP presently carries a Zacks Rank #1.
Aris is scheduled to report first-quarter 2026 results on May 6. The Zacks Consensus Estimate for ARIS’s first-quarter earnings per share is pegged at 77 cents, indicating 381.25% year-over-year growth. ARIS carries a Zacks Rank #2 (Buy) at present.
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EMN Q1 Earnings Beat Estimates, Revenues Miss on Lower Y/Y Volume
Key Takeaways
Eastman Chemical Company (EMN - Free Report) reported adjusted earnings of $1.09 per share for the first quarter of 2026, down 42.9% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $1.07.
Sales were $2,177 million, down 4.9% year over year and missing the consensus estimate of $2,209.4 million by 1.5%. Results reflected a strong sequential improvement in sales volume/mix in specialty businesses, even as demand remained pressured across several end markets, but year-over-year lower volume/mix and lower selling prices drove the sales decline in the quarter.
It was partly offset by a favorable foreign-currency impact. The continued customer inventory destocking in acetate tow and weak underlying demand in consumer discretionary end markets were key drags on volume/mix.
On profitability, a disciplined price-cost management alongside actions to secure critical raw materials and adjust pricing amid the disruption tied to the Middle East conflict. Eastman is also implementing roughly $500 million of price increases across its portfolio to offset raw material and distribution inflation.
Eastman Chemical Company Price, Consensus and EPS Surprise
Eastman Chemical Company price-consensus-eps-surprise-chart | Eastman Chemical Company Quote
Eastman Segment Highlights
Advanced Materials revenues were $715 million compared with $719 million a year ago. The figure beat our estimate of $708.2 million. Sales volume/mix was unchanged, as strong growth in specialty plastics was offset by weakness in performance films due to a soft automotive aftermarket, while lower selling prices reflected lower raw material costs.
Additives & Functional Products generated revenues of $739 million compared with $733 million in the prior-year quarter. The figure outpaced our estimate of $721.3 million. Eastman cited modest stability in sales volume/mix alongside lower selling prices and a favorable foreign-currency lift, with demand softness tied to building and construction weighing on coatings additives.
Chemical Intermediates revenues declined to $495 million from $545 million a year ago. The figure was above our estimate of $476.6 million. Management said January and February reflected weak commodity market conditions that pressured both pricing and volume/mix, while March saw tightening conditions for certain olefin and derivative products as the Middle East conflict began to influence market dynamics.
Fibers revenues fell to $225 million from $288 million in the year-ago quarter. The figure lagged our estimate of $270 million. Eastman pointed to continued acetate tow destocking and reduced customer shipments tied to the Middle East conflict, along with weakness in textiles end-market demand and modestly lower contract pricing.
EMN Financials
Eastman ended the first quarter with cash and cash equivalents of $665 million, up from $418 million at the end of the prior-year period. Cash and cash equivalents rose $99 million sequentially from $566 million at the beginning of the quarter.
Net debt was $4,555 million as of March 31, 2026, compared with $4,221 million at the end of 2025. Total borrowings were $5,220 million at quarter end.
Cash used in operating activities was $137 million in the first quarter versus $167 million in the prior-year quarter, with inventory increasing ahead of large, planned shutdowns in the second quarter. Eastman returned $96 million to stockholders through dividends during the quarter and reiterated that capital allocation priorities include dividends, capital spending and share repurchases while maintaining an investment-grade balance sheet.
Eastman Guidance
For full-year 2026, the Middle East conflict is a significant disruption that is likely to create net upside to earnings, with the most visible change versus January occurring in Chemical Intermediates as tightening market conditions improve margins, EMN noted. In specialties, Eastman expects pricing actions to offset higher raw material and distribution costs and also sees potential volume/mix upside tied to its U.S. asset footprint and security of supply.
Eastman is maintaining its cost-reduction target of $125 million to $150 million, net of inflation, and expects tailwinds from lower shutdown expense, improved utilization and favorable foreign-currency effects. Capital expenditures are expected to be approximately $400 million in 2026.
Looking to the second quarter, Eastman expects tailwinds from improved sales volume/mix in Advanced Materials and, to a lesser extent, Additives & Functional Products, along with substantial spread improvement in Chemical Intermediates. Headwinds include approximately $45 million of costs from planned maintenance, and the company projects second-quarter adjusted earnings of $1.70 to $1.90 per share.
Eastman said it is making solid progress in the commercial ramp-up of its Kingsport methanolysis facility and remains on track with revenue acceleration and about $30 million of incremental earnings tied to the asset. With consumer discretionary end markets still uneven and automotive expected to decline by low single digits versus 2025, the company’s near-term execution relies on holding price-cost discipline, managing planned maintenance impacts and capturing any supply-driven opportunities created by the ongoing industry disruption.
EMN’s Price Performance
EMN’s shares are down 2.8% over a year compared with the 16.6% growth recorded by the Zacks Chemicals Diversified industry.
Image Source: Zacks Investment Research
EMN’s Zacks Rank & Key Picks
EMN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. (CF - Free Report) , Compass Minerals International, Inc. (CMP - Free Report) and Aris Mining Corporation (ARIS - Free Report) .
CF Industries is slated to report first-quarter 2026 results on May 6. The Zacks Consensus Estimate for earnings is pegged at $2.35 per share, indicating 27.03% year-over-year growth. CF sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Compass Mineral is slated to report second-quarter fiscal 2026 results on May 6. The consensus estimate for CMP’s earnings per share is pegged at 66 cents. CMP presently carries a Zacks Rank #1.
Aris is scheduled to report first-quarter 2026 results on May 6. The Zacks Consensus Estimate for ARIS’s first-quarter earnings per share is pegged at 77 cents, indicating 381.25% year-over-year growth. ARIS carries a Zacks Rank #2 (Buy) at present.