News

Eastman Chemical Company EMN recorded a second-quarter 2024 profit of $230 million or $1.94 per share compared with $272 million or $2.27 in the year-ago quarter.

Barring one-time items, earnings were $2.15 per share, up from $1.99 in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.99.

Revenues increased roughly 1.7% year over year to $2,363 million in the quarter. The figure missed the Zacks Consensus Estimate of $2,369.3 million. Sales volume increased slightly, led by durables and automotive end markets and was also aided by the end of customer inventory destocking in most end markets. The improvement was partly offset by the weakness in the building and construction end markets.

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 declined 3.9% year over year to $718 million in the reported quarter. Lower selling prices were attributed to the fall in raw material prices, including cost-pass-through contracts for care additives and functional amines. Sales volume remained constant, with an increase in coatings and care additives offsetting a fall in specialized fluids due to reduced heat transfer fluid project fulfillments. The figure was higher than our estimate of $715.3 million.

Revenues from the Advanced Materials unit increased 7.6% year over year to $795 million in the reported quarter. Sales volume rose due to the end of customer inventory destocking in durables and packaging markets, as well as premium interlayer product growth in the automotive market. This increase was somewhat offset by decreased selling prices. The figure was higher than our estimate of $733.8 million.

Chemical Intermediates sales were flat year over year at $515 million. The end-of-customer inventory destocking was the primary factor driving higher sales volume across the segment. Decreased raw material and energy prices led to lower selling prices, especially for acetyls and intermediates goods, despite higher sales volume. The figure was marginally lower than our estimate of $515.5 million.

Fibers segment sales increased 2.2% year over year to $330 million. Higher selling prices were triggered by acetate price rises. Sales volume mainly jumped owing to expansion in the textiles product line. The figure was lower than our estimate of $371.5 million.

Financials

In the second quarter of 2024, operating activities generated $367 million in cash. The company returned $195 million to shareholders through share repurchases and dividends in the quarter.

Guidance

The company anticipates a $50 million incremental EBITDA contribution from its Kingsport methanolysis facility. It expects EPS for 2024 to be between $7.40 and $7.85. Furthermore, EMN expects to deliver around $1.4 billion in operating cash flow in 2024.

Price Performance

Eastman Chemical’s shares have risen 10.9% over a year compared with an 11.7% decline of the industry.

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Zacks Rank & Key Picks

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

Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines AEM, Ero Copper Corp. ERO and Kinross Gold Corporation KGC.

Agnico Eagle is slated to report second-quarter results on Jul 31, after market close. The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 87 cents. AEM beat the consensus in the last four quarters, with the average earnings surprise being 16.5%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ero Copper is slated to report second-quarter results on Aug 1, after market close. The Zacks Consensus Estimate for ERO’s second-quarter earnings is pegged at 24 cents. ERO currently carries a Zacks Rank #2. It beat the consensus in three of the last four quarters, with the average earnings surprise being 53.9%

Kinross will report results for the second quarter on Jul 31. The Zacks Consensus Estimate for Kinross's second-year earnings is pegged at 13 cents. KGC, a Zacks Rank #2 stock, beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 72.9% in the past year.

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