Specialty chemicals, additives and fibers providerEastman
) has repositioned its business in recent years.
In 2011, the company acquired Dynaloy, a producer of solvents;
Sterling Chemicals, a petrochemical producer; and Brazilian
company Scandiflex, a manufacturer of plasticizers that expanded
Eastman's footprint in Brazil.
Also in 2011, Eastman entered into a joint venture to make
acetate tow in China. The venture is expected to be operational
Acetate tow is used in making cigarette filters, ink
reservoirs for pens, fiber tips for markers, medical testing
devices, and oil and fuel filters.
In July, Eastman Chemical completed the acquisition of
Solutia, a specialty chemicals company that broadens Eastman's
reach in the Asia Pacific region and increases Eastman's access
to the automotive and architectural industries.
Also in July, Eastman announced a second joint venture in
China to build a resin plant in Nanjing. The facility is expected
to begin operations at the end of 2014.
"Given all of the portfolio work we have done over the last
several years, including the Solutia acquisition, we now have a
portfolio of businesses that we expect to produce solid,
consistent earnings growth and cash generation for years to
come," CEO James P. Rogers said at the earnings call Oct. 26.
Q3 was the first quarter that included Solutia's
Earnings rose 25% on a sales pop of 25%. The Street expects
EPS to rise 66% in Q4 on a 30% sales gain.
Apart from the acquisitions, the company is benefiting from
customer substitution from phthalate plasticizers to Eastman's
Nonphthalate plasticizers are used in sensitive areas such as
toys and food-contact applications. Phthalate plasticizers raise
health concerns because they can leach.
Eastman pays a quarterly dividend of 26 cents a share, which
works out to an annualized yield of 1.7%.
The dividend was initiated in 1994 and underwent a 13-year
period when it was not changed. The company raised the dividend
in 2010 and 2011 and has never decreased the payout.