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What's in the Cards for Eastman Chemical's (EMN) Q1 Earnings?
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Eastman Chemical Company (EMN - Free Report) is set to release first-quarter 2020 results after the closing bell on Apr 30. Weak demand due to the coronavirus pandemic might have impacted the company’s performance in the quarter. However, the company’s earnings are likely to have benefited from its cost management actions and growth in high-margin products.
Eastman Chemical missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while beat once. For this timeframe, the company has a negative surprise of roughly 2%, on average.
Shares of the Eastman Chemical are down 26.1% over a year, compared with the 36.9% decline of its industry.
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Eastman Chemical, last month, said that it anticipates first-quarter earnings per share to rise from that in the prior-year period.
The Zacks Consensus Estimate for revenues for Eastman Chemical for the first quarter is currently pegged at $2,214 million, indicating a 7% year-over-year decline.
Moreover, the Zacks Consensus Estimate for Eastman Chemical’s Additives and Functional Products division revenues is pegged at $787 million, suggesting a 7.9% decline year over year. The consensus estimate for Advanced Materials unit’s revenues is $642 million, indicating a fall of 2.3% year over year.
The Zacks Consensus Estimate for the Chemical Intermediates segment’s revenues stands at $563 million, indicating a 14% decline from the year-ago quarter. The same for the Fibers segment is pegged at $206 million, calling for a 3.3% year-over-year decline.
Factors to Watch For
Eastman Chemical is focused on productivity and cost-cutting actions in the wake of a challenging environment. It is taking an aggressive approach to cost management to keep its manufacturing costs in control. Benefits of these actions are expected to get reflected on first-quarter results. Moreover, the company’s actions to raise selling prices of its products are likely to have contributed to its bottom line in the quarter.
The company is also focused on growing new business revenues from innovation. Eastman Chemical expects to generate roughly $500 million of new business revenues in 2020. The company is likely to have gained from growth in high-margin innovation products in the quarter to be reported.
However, lower demand due to coronavirus might have affected the company’s sales volumes in the first quarter. Disruptions associated with the pandemic are likely to have hurt demand across some of the company’s end-markets.
Eastman Chemical is also exposed to headwind from lower product spreads in its Chemical Intermediates segment. Lower spreads are likely to have weighed on margins in this unit in the March quarter.
Our proven model does not conclusively predict an earnings beat for Eastman Chemical this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. Earnings ESP: Earnings ESP for Eastman Chemical is -4.58%. This is because the Most Accurate Estimate is currently pegged at $1.62 while the Zacks Consensus Estimate stands at $1.69. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Eastman Chemical carries a Zacks Rank #4 (Sell).
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Franco-Nevada Corporation (FNV - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +1.38% and carries a Zacks Rank #2.
Yamana Gold Inc. , scheduled to release earnings on Apr 30, has an Earnings ESP of +12.50% and carries a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
What's in the Cards for Eastman Chemical's (EMN) Q1 Earnings?
Eastman Chemical Company (EMN - Free Report) is set to release first-quarter 2020 results after the closing bell on Apr 30. Weak demand due to the coronavirus pandemic might have impacted the company’s performance in the quarter. However, the company’s earnings are likely to have benefited from its cost management actions and growth in high-margin products.
Eastman Chemical missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while beat once. For this timeframe, the company has a negative surprise of roughly 2%, on average.
Shares of the Eastman Chemical are down 26.1% over a year, compared with the 36.9% decline of its industry.
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Eastman Chemical, last month, said that it anticipates first-quarter earnings per share to rise from that in the prior-year period.
The Zacks Consensus Estimate for revenues for Eastman Chemical for the first quarter is currently pegged at $2,214 million, indicating a 7% year-over-year decline.
Moreover, the Zacks Consensus Estimate for Eastman Chemical’s Additives and Functional Products division revenues is pegged at $787 million, suggesting a 7.9% decline year over year. The consensus estimate for Advanced Materials unit’s revenues is $642 million, indicating a fall of 2.3% year over year.
The Zacks Consensus Estimate for the Chemical Intermediates segment’s revenues stands at $563 million, indicating a 14% decline from the year-ago quarter. The same for the Fibers segment is pegged at $206 million, calling for a 3.3% year-over-year decline.
Factors to Watch For
Eastman Chemical is focused on productivity and cost-cutting actions in the wake of a challenging environment. It is taking an aggressive approach to cost management to keep its manufacturing costs in control. Benefits of these actions are expected to get reflected on first-quarter results. Moreover, the company’s actions to raise selling prices of its products are likely to have contributed to its bottom line in the quarter.
The company is also focused on growing new business revenues from innovation. Eastman Chemical expects to generate roughly $500 million of new business revenues in 2020. The company is likely to have gained from growth in high-margin innovation products in the quarter to be reported.
However, lower demand due to coronavirus might have affected the company’s sales volumes in the first quarter. Disruptions associated with the pandemic are likely to have hurt demand across some of the company’s end-markets.
Eastman Chemical is also exposed to headwind from lower product spreads in its Chemical Intermediates segment. Lower spreads are likely to have weighed on margins in this unit in the March quarter.
Eastman Chemical Company Price and EPS Surprise
Eastman Chemical Company price-eps-surprise | Eastman Chemical Company Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Eastman Chemical this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Eastman Chemical is -4.58%. This is because the Most Accurate Estimate is currently pegged at $1.62 while the Zacks Consensus Estimate stands at $1.69. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Eastman Chemical carries a Zacks Rank #4 (Sell).
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The Scotts Miracle-Gro Company (SMG - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +1.49% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada Corporation (FNV - Free Report) , scheduled to release earnings on May 6, has an Earnings ESP of +1.38% and carries a Zacks Rank #2.
Yamana Gold Inc. , scheduled to release earnings on Apr 30, has an Earnings ESP of +12.50% and carries a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>