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Eastman Chemical Completes IATF Transition at Saflex Sites

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Eastman Chemical Company (EMN - Free Report) , manufacturer of Saflex product glazing for automotive applications, has completed the transition at all Saflex manufacturing sites to International Automotive Task Force (IATF) 16949:2016 from the earlier quality management system, ISO/TS 16949.

The completion of IATF certification testifies Eastman Chemical’s commitment to customers supplying to the automotive industry by focusing on better operations and supply to customers as well as strengthening quality management systems.

The IATF is an international standard for quality management systems (QMS) and is widely used by the automotive industry. In conjunction with ISO, IATF establishes a QMS that drives continual improvement. IATF has many additional requirements from the general ISO 9001 standard, with an emphasis in product safety, defect prevention, risk evaluation and the reduction of waste and variation in the supply chain.
In a year’s time, shares of Eastman Chemical have outperformed the industry it belongs to. The stock has lost around 11.7% compared with the industry’s fall of 19.9%.

During the third-quarter earnings call, Eastman Chemical noted that strong volume gains in the specialty businesses, disciplined cost management and a lower effective tax rate have helped it achieve year-over-year adjusted earnings per share growth of 13% during the first nine months of 2018. The company continues to expect year-over-year adjusted earnings per share growth of 10-14% for 2018. The company also expects to generate roughly $1.1 billion of free cash flow in 2018.

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

Eastman Chemical has been seeing a rise in raw materials costs, mostly in its chemical intermediates business. Raw materials cost headwind is expected to persist through the remainder of 2018. Nevertheless, the company’s productivity and price hike actions are likely to help it offset the input cost pressure.

Eastman Chemical Company Price and Consensus


Zacks Rank & Stocks to Consider

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. (CF - Free Report) , The Mosaic Company (MOS - Free Report) and Methanex Corporation (MEOH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). 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%. The company’s shares have gained 21.7.9% in the past year.

Mosaic has an expected long-term earnings growth rate of 7%. The stock has rallied 48.4% in a year’s time.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have gained 8.5% in the past year.

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