Eastman Chemical Company EMN is scheduled to release third-quarter 2024 results after the closing bell on Oct. 31.
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The company surpassed Zacks Consensus Estimate for earnings in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of around 6.5% on average. EMN pulled off an earnings surprise of 8% in the last reported quarter.
Eastman is expected to have benefited from cost-cutting and productivity initiatives, as well as its innovation-driven growth strategy. However, soft demand in certain markets is likely to have weighed on its third-quarter performance.
EMN stock has rallied 40.2% in the past year compared with the Zacks Chemicals Diversified industry’s 6.7% rise.
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Let’s see how things are shaping up for this announcement.
What Do EMN's Revenue Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,394.2 million, which implies a rise of around 5.6% from the year-ago reported number.
Our estimate for EMN’s Additives and Functional Products division’s revenues is pegged at $698.8 million, suggesting a rise of 4.3% year over year. The same for the Advanced Materials unit’s revenues is $759.1 million, indicating an increase of 1.7%.
Our estimate for the Chemical Intermediates segment’s revenues is pinned at $561 million, suggesting a year-over-year rise of 6.5%. The same for the Fiber segment stands at $365.8 million, indicating an increase of 13.3% year over year.
Factors at Play for EMN Stock
Eastman's cost-cutting initiatives are anticipated to have benefited the company in the third quarter. It is expected to have gained from its operational transformation efforts, which are likely to have resulted in lower operating costs.
EMN is taking action to keep its manufacturing and administrative costs in control. It achieved cost savings of around $200 million in 2023, net of inflation. The company also plans to maintain pricing discipline and improve asset utilization throughout this year. Pricing initiatives and lower raw material and energy costs are also expected to have supported its bottom line in the September quarter.
Innovation and market development initiatives are also expected to have aided EMN’s sales volumes in the quarter to be reported. Eastman aims to increase new business revenues by utilizing its innovation-driven growth strategy. Its specialty portfolio is expected to have supported sales across key end markets.
EMN is exposed to headwinds from weak demand in specific markets. It is seeing soft demand in building & construction and cautious customer behavior in consumer durables and electronics. Demand in building & construction remains sluggish in most regions.
While Eastman Chemical is seeing an end of customer inventory de-stocking across most of its end markets, the same is expected to have continued in medical applications in the September quarter. Weaker demand in certain markets is likely to have adversely impacted its performance in the third quarter.
Eastman Chemical Company Stock Price and EPS Surprise
Eastman Chemical Company price-eps-surprise | Eastman Chemical Company Quote
What Our Model Unveils for EMN Stock
Our proven model does not conclusively predict an earnings beat for Eastman 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 EMN is +0.47%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $2.12. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: EMN currently carries a Zacks Rank #4 (Sell).
Basic Materials Stocks That Warrant a Look
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:
Agnico Eagle Mines Limited AEM, scheduled to release earnings on Oct. 30, has an Earnings ESP of +5.82% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the third quarter is currently pegged at 98 cents.
DuPont de Nemours, Inc. DD, slated to release earnings on Nov. 5, has an Earnings ESP of +1.00% and carries a Zacks Rank #2 at present.
The consensus mark for DD’s third-quarter earnings is currently pegged at $1.03.
Kinross Gold Corporation KGC, scheduled to release third-quarter earnings on Nov. 5, has an Earnings ESP of +12.29%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the third quarter is currently pegged at 17 cents. KGC currently carries a Zacks Rank #1.
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