Eastman's (EMN) Q1 Earnings and Sales Surpass Estimates

Eastman Chemical Company EMN reported first-quarter 2024 earnings of $1.39 per share, reflecting a rise of 24.1% from the year-ago quarter's figure of $1.12.

EMN posted adjusted earnings of $1.61 per share, down 1.2% from the year-ago quarter figure of $1.63. It surpassed the Zacks Consensus Estimate of $1.41.

The company’s revenues in the first quarter were $2,310 million, which beat the Zacks Consensus Estimate of $2,259.2 million. Sales decreased around 4.2% from $2,412 million reported in the prior-year quarter.

The company's sales volumes and earnings increased sequentially, driven by a return to primary demand for many of its specialty products in the Advanced Materials and Additives & Functional Products segments.

Eastman Chemical Company Price, Consensus and EPS Surprise

Eastman Chemical Company Price, Consensus and EPS Surprise

Eastman Chemical Company price-consensus-eps-surprise-chart | Eastman Chemical Company Quote

Segment Highlights

Advanced Materials: Revenues from this segment increased 0.8% year over year to $748 million in the first quarter. The figure was above our estimate of $690.1 million. Higher sales volume in specialty plastics was driven by lower levels of customer inventory destocking and a return to primary end-market demand, particularly in consumer durables. This gain was largely offset by sustained customer inventory destocking in the medical end market and a reduced sales volume in performance films due to strong demand in China the previous year.

Additives & Functional Products: Revenues from this segment were $704 million, reflecting a decline of 9.4% from the year-ago quarter. The figure was below our estimate of $712.9 million. The decrease in selling prices was mostly attributable to cost-pass-through agreements in care additives and functional amines. Sales volume fell marginally as an increase in coatings and care additives was more than offset by lower sales volume/mix in specialty fluids due to the timing of heat transfer fluid project completion and customer inventory destocking in the agriculture end market.

Chemical Intermediaries: Net sales from this segment were down 11.2% year over year to $523 million. The figure was above our estimate of $499.2 million. Selling prices in the segment fell due to weak market conditions and lower variable expenses. Sales volume rose marginally, driven by growth in the plasticizers product line as a result of lower levels of customer inventory destocking and a shift back to primary end-market demand in building and construction.

Fibers: This segment reported net sales amounting to $331 million, which reflected a rise of 9.2% year over year. The figure was below our estimate of $337.1 million. Sales volume climbed primarily owing to a double-digit percentage growth in textiles, which was driven by sustained high acceptance of Naia sustainable textile products.

Financials

In the first quarter of 2024, cash used in operating activities totaled $16 million. Dividends paid to stockholders were $95 million.

Guidance

Eastman Chemical predicts uncertain primary demand in key markets and regions through the remainder of 2024. However, the company continues to gain from its innovation-driven growth approach, which allows for growth beyond its end markets. Eastman expects to gain from revenues and earnings generated by its Kingsport methanolysis unit, mostly in the second half of the year. The company plans to maintain pricing discipline and improve asset utilization throughout the year.

EMN projects its cash flow from operating activities to be roughly $1.4 billion for 2024. The company expects adjusted EPS for full-year 2024 to be between $7.25 and $8.

Price Performance

EMN’s shares are up 20.2% over a year against a 5% decline recorded by its industry.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Eastman currently carries a Zacks Rank #3 (Hold).

Upcoming Releases

Scotts Miracle-Gro Company SMG is slated to report fiscal second-quarter results on May 1, before market open. The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $3.33 per share. SMG beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 3.4%. The company’s shares have gained roughly 5% in the past year. SMG carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ero Copper Corp. ERO is slated to report first-quarter results on May 7, after market close. The Zacks Consensus Estimate for ERO’s first-quarter earnings is pegged at 5 cents The company’s shares have gained around 1% in the past year. ERO currently carries a Zacks Rank #1.

Innospec Inc. IOSP is slated to report first-quarter results on May 9, after market close. The consensus estimate for Innospec’s earnings is pegged at $1.64 per share. IOSP, carrying a Zacks Rank #2, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 10.5%. The company’s shares have gained around 20% in the past year.

 

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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 Nasdaq, Inc.

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