) is set to release its second-quarter 2014 results after the close
on Jul 28.
In the last quarter, the chemical maker delivered a 0.62% positive
earnings surprise. The company, however, saw lower profit in the
quarter, impacted by higher impairment and restructuring charges.
Eastman Chemical has beaten the Zacks Consensus Estimate in the
trailing 4 quarters with an average beat of 5.21%. Let's see how
things are shaping up for this announcement.
Factors to Consider this Quarter
Eastman Chemical, in its first quarter call, said that it expects
higher sales in the remainder of 2014. The company expects to gain
from specific actions that it has taken up to increase earnings as
well as balanced deployment of strong cash flow. It also sees
higher demand in the coatings and tires markets.
Eastman Chemical's diversified chemical portfolio, along with its
integrated and diverse downstream businesses remains its strength.
It also benefits from business restructuring and cost-cutting
Eastman Chemical should continue to benefit from synergies related
to Solutia acquisition in the June quarter. The acquisition has
boosted its foothold in the emerging markets, especially in Asia
However, Eastman Chemical remains exposed to volatility in raw
material costs. Higher energy and raw material costs, particularly
for propane, are expected to weigh on the company's earnings in the
second quarter. Moreover, weak demand for adhesives resins in
specific markets and lower pricing due to competitive pressure may
continue to affect sales in the company's Adhesives and
Our proven model does not conclusively show that Eastman Chemical
is likely to beat the Zacks Consensus Estimate in the second
quarter. That is because a stock needs to have both a positive
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. That is not the case here, as you will see below.
ESP for Eastman Chemical is 0.00%. This is because both the Most
Accurate Estimate and the Zacks Consensus Estimate are pegged at
Zacks Rank #3 (Hold):
Eastman Chemical's Zacks Rank #3 when combined with an ESP of 0.00%
makes surprise prediction difficult. We caution against stocks with
Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to Consider
Here are some other stocks in the basic materials sector you may
want to consider as our model shows they have the right combination
of elements to post an earnings beat this quarter:
Agrium Inc. (
) has earnings ESP of +1.95% and retains a Zacks Rank #3 (Hold).
CF Industries Holdings, Inc. (
) has earnings ESP of +1.70% and sports a Zacks Rank #3 (Hold).
Albemarle Corporation (
) has earnings ESP of +0.92% and retains a Zacks Rank #3
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EASTMAN CHEM CO (EMN): Free Stock Analysis
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ALBEMARLE CORP (ALB): Free Stock Analysis
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