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Eastman Chemical's (EMN) Q2 Earnings & Sales Top Estimates

·4 min read

Eastman Chemical Company EMN recorded a profit of $256 million or $2.03 per share in the second quarter of 2022, versus a loss of $146 million or $1.07 in the year-ago quarter.

Barring one-time items, earnings were $2.83 per share for the quarter, up from $2.46 in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $2.69.

Revenues rose around 5% year over year to $2,784 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $2,752.6 million.

Eastman Chemical Company Price, Consensus and EPS Surprise

 

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 Review

Revenues from the Additives and Functional Products division rose 27% year over year to $835 million for the reported quarter, aided by higher selling prices and increased sales volume/mix. Volumes were driven by strong demand in major markets, including semiconductors, personal care and animal nutrition and improved product availability in care additives.

Revenues from the Advanced Materials unit rose 10% year over year to $846 million in the previous-year quarter. The upside was driven by higher selling prices that offset the unfavorable foreign currency exchange impacts. Selling prices were driven by specialty plastics and advanced interlayers.

Chemical Intermediates sales climbed 17% year over year to $861 million, led by higher selling prices due to higher raw material, energy and distribution prices. Sales volume/mix was roughly stable as strong demand in end markets, including food, feed and agriculture and pharma was offset by softness in transportation and building and construction.

Fibers segment sales went up 9% year over year to $242 million due to higher selling prices.

Financials

Eastman Chemical ended the quarter with cash and cash equivalents of $456 million, a roughly 25% year-over-year decline. Net debt at the end of the quarter was $4,535 million, a roughly 8% decline year over year.

Eastman Chemical generated cash from operating activities of $245 million compared with $426 million a year ago. The company also returned $948 million to its shareholders through share repurchases and dividends during the first half of 2022.

Guidance

Eastman Chemical stated that it expects to leverage its innovation-driven growth model to deliver above end market growth in the specialty product lines. It also projects to continue raising prices, especially in specialty product lines, in response to persistently high inflation, the company noted.
The company continues to expect adjusted earnings per share of $9.50-$10 for 2022. It also anticipates operating cash flow to be around $1.5 billion this year.

Price Performance

Eastman Chemical’s shares have declined 15.5% over a year, compared with a 10.8% fall of the industry.

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Zacks Rank & Other Key Picks

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

Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB, Cabot Corporation CBT and Sociedad Quimica y Minera de Chile S.A. SQM.

Albemarle has a projected earnings growth rate of 241.8% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 21.5% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 22.5%, on average. ALB has gained around 14.7% in a year and currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 32.6% over a year.

Sociedad has a projected earnings growth rate of 431.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 36.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has gained 104.7% in a year. The company sports a Zacks Rank #1.


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