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Eastman Chemical's Debottleneck Projects to Boost Capacity

Zacks Equity Research

Eastman Chemical Company EMN has reaffirmed its commitment to alkyl amines’ production at its global integrated assets situated in North America, Europe and Asia. The chemical maker has several debottlenecking projects underway to continuously increase capacity for meeting the rising global demand.

Its most recent debottleneck was completed in the third quarter of 2019 and another is anticipated to be completed in 2020.

Alkyl amines, which are part of the company’s Chemical Intermediates segment, are used in a wide range of end markets such as home and personal care, animal nutrition, and water treatment.

In the third quarter, Chemical Intermediates sales declined 18% year over year to $579 million, hurt by lower selling prices and reduced sales volumes, especially for functional amine products and intermediates.

Shares of Eastman Chemical have lost 2.2% in the past year compared with the industry’s 22.8% decline.



The company recorded a profit of $266 million or $1.93 per share in the third quarter, down roughly 35% from the year-ago profit of $412 million or $2.89 per share. Its adjusted earnings per share of $1.94 missed the Zacks Consensus Estimate of $1.99.

The company’s revenues dipped around 9% year over year to $2,325 million in the quarter. Moreover, the top line missed the Zacks Consensus Estimate of $2,365.9 million.

Eastman Chemical anticipates sales volume and capacity utilization to decline for the fourth quarter due to the worsening of the global business environment, resulting from trade uncertainties and other macro factors. Considering the factors, it anticipates adjusted earnings per share of $7.00-$7.20 for 2019.

Amid the difficult business environment, the company remains focused on managing costs and growing new business revenues from innovation, especially in the Advanced Materials segment.

Eastman Chemical Company Price and Consensus


Eastman Chemical Company Price and Consensus

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

Zacks Rank & Stocks to Consider

Eastman Chemical currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Impala Platinum Holdings Ltd. IMPUY, Franco-Nevada Corporation FNV and Agnico Eagle Mines Limited AEM, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 248.3% for the current fiscal year. The company’s shares have surged 243.7% in the past year.

Franco-Nevada has a projected earnings growth rate of 46.2% for 2019. The company’s shares have rallied 44.3% in a year.

Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 67.8% in the past year.

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