Eastman Chemical beats profit estimates on lowering inventories, costs

Oct 26 (Reuters) - Eastman Chemical on Thursday beat third-quarter profit estimates as the diversified chemical company benefited from steps taken to cut costs and reduce inventory levels.

Slow demand in key markets including China and Europe has prompted chemical companies to cut jobs and take other steps to minimize operation costs.

Eastman disclosed plans earlier this year to reduce manufacturing, supply chain, and non-manufacturing costs by a total of $200 million, net of inflation.

"Our third-quarter results reflect decisive steps we took to aggressively reduce inventories and prioritize strong cash generation," said CEO Mark Costa in a statement.

The company's adjusted net income was $1.47 per share for the three months ended Sept. 30, beating analysts' average expectations of $1.44 per share, according to LSEG data.

"We are encouraged to see modest improvements in demand across some markets, including consumer durables and personal care, but the pace of recovery has been slower than expected," said CEO Mark Costa in a statement.

Eastman's sales revenue fell about 16%, hurt by a decline in both volumes and prices, as the chemical maker continues to see weak demand and customer inventory destocking across several end markets.

Analysts have warned that the destocking trends are only expected to abate next year.

"Demand remains muted as customers are cautious in the current challenging environment," Costa added.

The company expects 2023 earnings of between $6.30 and $6.50 per share.

(Reporting by Saikeerthi and Sourasis Bose in Bengaluru; Editing by Devika Syamnath)