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Eastman Chemical Hikes DMAPA Prices Amid High Operating Costs

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Eastman Chemical Company (EMN - Free Report) is raising the prices of Dimethylaminopropylamine (DMAPA), effective Oct 15, or as contracts permit.

The company is lifting prices of DMAPA by 12 cents per lb in North America as well as by $265/MT in Latin America. Increased operating costs, especially of raw materials, have led to the hike.

During the second-quarter earnings call, Eastman Chemical stated that strong volume gains in the specialty businesses and disciplined cost management have helped the company achieve strong earnings growth in first-half 2018. The company continues to expect year-over-year growth of 10-14% in adjusted earnings per share for 2018.

In a year’s time, shares of Eastman Chemical have outperformed the industry it belongs to. While the stock has gained around 8.5%, the industry saw a decline of 3.9%.

The company is focused on productivity and cost-cutting actions, which are helping it offset raw material cost inflation and other cost headwinds. In 2018, Eastman Chemical expects to deliver $100 million of cost savings under its cost-reduction program.

Eastman Chemical is seeing a rise in raw materials costs and the same is expected to persist through the second half of 2018. It is exposed to volatility in ethylene prices as well. Nevertheless, the company’s productivity measures and actions to raise selling prices of products are likely to help offset such issues.

Eastman Chemical Company Price and Consensus



Zacks Rank & Other Stocks to Consider

Eastman Chemical is a Zacks Rank #2 (Buy) stock.

A few other top-ranked companies in the basic materials space are ArcelorMittal (MT - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) .

ArcelorMittal has an expected long-term earnings growth rate of 4.8% and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 16.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #2. The company’s shares have rallied 59% in the past year.

Steel Dynamics has an expected long-term earnings growth rate of 12% and a Zacks Rank #2. Its shares have risen 29.1% in a year’s time.

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