Eastman Collaborates with Balcas - Analyst Blog


Eastman Chemical Company ( EMN ) announced a strategic collaboration with Balcas Ltd ., whereby Balcas will use Eastman's Cerfis technology to manufacture interior moulding for distribution in Europe.

Balcas, one of Britain and Ireland's largest wood products suppliers, has a turnover of £65 million. In addition to 300 people, who are engaged in forest harvesting and haulage, the Group has 700 direct employees.

Eastman's Cerfis licensing program enables licensees to utilize patented surface technology to create superior surface solutions.

By offering technology that enhances product aesthetics, performance, and consistency, Eastman's Cerfis licensing program facilitates manufacturers, distributors, and retailers to offer something unique to their customers for improving customer satisfaction while opening new market opportunities.

Recently, Eastman reported fourth-quarter earnings of 71 cents per share compared with 70 cents per share a year earlier, missing the Zacks Consensus Estimate of 80 cents per share. The 2010 EPS excluded $26 million of asset impairments and restructuring charges and $115 million of early debt extinguishment costs.

Revenues climbed 18% year over year to $1.7 billion, driven by increased selling prices and higher sales volumes. Operating earnings in the quarter increased to $163 million from $161 million in the fourth quarter of 2010.

For full-year 2011, the company reported earnings of $4.56 per share (excluding asset impairments and restructuring charges and gains) compared with $3.48 per share in 2010 (excluding asset impairments, restructuring charges and early debt extinguishment charges).

Eastman's diversified chemical portfolio, along with its integrated and diverse downstream businesses, is driving earnings. Eastman benefits from business restructuring and cost-cutting measures. The company sold unprofitable units and closed down the poorly performing ones. However, the company faces volatility in raw material and energy costs, higher pension expenses and other growth-related costs.

Eastman battles with large multinational companies, such as Celanese Corporation ( CE ) and The Dow Chemical Company ( DOW ) and EI DuPont de Nemours and Company ( DD ) across its major business segments.

Currently, Eastman has a Zacks #1 Rank (Strong Buy) for the short-term (1 to 3 months). We are maintaining a long-term (more than 6 months) "Neutral" recommendation on the shares.

CELANESE CP-A ( CE ): Free Stock Analysis Report
DU PONT ( EI ) DE ( DD ): Free Stock Analysis Report

DOW CHEMICAL ( DOW ): Free Stock Analysis Report
EASTMAN CHEM CO ( EMN ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CE , DD , DOW , EI , EMN



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