Eastman Chemical Company
(
EMN">EMN
) has recently laid the foundation of a new plant inHeifei , China,
to manufacture acetate tow. The new facility will be operated and
owned by EastmanShuangwei Fibers Company (ESFCL ), which is in
partnership with China National Tobacco, and it is estimated to
generate 30,000 metric tons of acetate tow on the completion of the
plant.
Owing to this joint venture, Eastman will be able to extend its
operations into the world's rapidly growing economy, China, where
this plant is going to be the company's first investment for an
acetate tow facility. The plant will become functional from the
middle of 2013.
Thus through this joint venture Eastman intends to expand
its global acetate tow business with China playing a significant
role in the company's expansion plans. This new plant is expected
to satisfy the growing needs of the customers.
About two months back, Eastman released its third quarter 2011
results. The company reported third-quarter earnings of $1.19
per share, compared with $1.11 per share, a year earlier and beat
theZacks Consensus estimate of $1.11 per share. This excludes $7
million of restructuring charges, primarily for severance
associated with the acquisition and integration of Sterling
Chemicals, Inc.
Inclusive of the charges, earnings from continuing operations
were $1.16 per diluted share in the third quarter of 2011 versus
$1.11 per diluted share in the year ago quarter.
Revenues climbed 20% year over year to $1.8 billion, driven by
increased selling prices.
Eastman Chemical's diversified chemical portfolio, along with
its integrated and diverse downstream businesses, is driving
earnings. Eastman also benefits from business restructuring and
cost-cutting measures. The company, having sold its unprofitable
units has closed down the poorly performing ones as well.
The company, however, 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 Corp.
(
CE
) and
The Dow Chemical Co.
(
DOW
) and
EI DuPont deNemours & Co.
(
DD
) across its major business segments.
Currently, Eastman has a short-term (1 to 3 months)Zacks #3 Rank
(Hold) and a long-term (6 months and higher) Neutral
recommendation.
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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