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Eastman Chemical (EMN) Q3 Earnings & Sales Surpass Estimates
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Eastman Chemical Company (EMN - Free Report) recorded profit of $161 million or $1.18 per share for the third quarter of 2020, down from the year-ago profit of $266 million or $1.93 per share.
Barring one-time items, earnings were $1.57 per share for the quarter, down from $1.94 in the year ago-quarter. Earnings, however, topped the Zacks Consensus Estimate of $1.40.
Revenues dropped around 9% year over year to $2,122 million in the quarter, hurt by lower sales volumes resulting from the impacts of the coronavirus pandemic and lower selling prices due to reduced raw material prices. The top line, however, surpassed the Zacks Consensus Estimate of $2,100.7 million.
The company saw improved demand across its end markets in the reported quarter. It also gained from its innovation-driven growth model.
Eastman Chemical Company Price, Consensus and EPS Surprise
Revenues from the Additives and Functional Products division fell 11% year over year to $742 million for the reported quarter, hurt by lower volumes and selling prices as well as less favorable product mix. Volumes fell for products sold in transportation end markets due to the impact of the pandemic.
Revenues from the Advanced Materials unit slipped 4% year over year to $668 million. The decline can be attributed to lower volumes, reduced prices and less favorable product mix.
Chemical Intermediates sales dropped 13% year over year to $506 million, hurt by lower selling prices and sales volumes. Lower raw material prices impacted selling prices. Volumes fell due to the unfavorable impacts of coronavirus on demand and planned maintenance shutdowns.
Fibers segment sales went down 5% year over year to $206 million. Acetate tow sales volumes were stable in the quarter. However, sales were impacted by lower volumes of textiles products due to the pandemic and reduced acetate tow selling prices.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $650 million, a more than three fold year-over-year increase. Net debt at the end of the quarter was $5,215 million, down around 13% year over year.
Eastman Chemical generated net cash from operating activities of $442 million and free cash flow of $360 million during the reported quarter.
The company also returned $90 million to its shareholders through dividends during the quarter.
Guidance
Eastman Chemical said that it entered the fourth quarter of 2020 with strong momentum. It expects adjusted earnings per share for the fourth quarter to be similar to fourth-quarter 2019 adjusted earnings per share of $1.42. The company also noted that it is on track to deliver roughly $150 million of cost savings for 2020 with around $40 million expected in the fourth quarter. It also expects to generate more than $1 billion of free cash flow this year.
Price Performance
Eastman Chemical’s shares have gained 7.7% over a year, outperforming the 1.8% decline of the industry it belongs to.
Zacks Rank & Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and B2Gold Corp. (BTG - Free Report) .
Agnico Eagle has a projected earnings growth rate of 102.1% for the current year. The company’s shares have gained around 28% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold has an expected earnings growth rate of 100% for the current year. The company’s shares have surged around 51% in the past year. It currently carries a Zacks Rank #2 (Buy).
B2Gold has a projected earnings growth rate of 250% for the current year. The company’s shares have shot up roughly 77% in a year. It currently carries a Zacks Rank #2.
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Eastman Chemical (EMN) Q3 Earnings & Sales Surpass Estimates
Eastman Chemical Company (EMN - Free Report) recorded profit of $161 million or $1.18 per share for the third quarter of 2020, down from the year-ago profit of $266 million or $1.93 per share.
Barring one-time items, earnings were $1.57 per share for the quarter, down from $1.94 in the year ago-quarter. Earnings, however, topped the Zacks Consensus Estimate of $1.40.
Revenues dropped around 9% year over year to $2,122 million in the quarter, hurt by lower sales volumes resulting from the impacts of the coronavirus pandemic and lower selling prices due to reduced raw material prices. The top line, however, surpassed the Zacks Consensus Estimate of $2,100.7 million.
The company saw improved demand across its end markets in the reported quarter. It also gained from its innovation-driven growth model.
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 fell 11% year over year to $742 million for the reported quarter, hurt by lower volumes and selling prices as well as less favorable product mix. Volumes fell for products sold in transportation end markets due to the impact of the pandemic.
Revenues from the Advanced Materials unit slipped 4% year over year to $668 million. The decline can be attributed to lower volumes, reduced prices and less favorable product mix.
Chemical Intermediates sales dropped 13% year over year to $506 million, hurt by lower selling prices and sales volumes. Lower raw material prices impacted selling prices. Volumes fell due to the unfavorable impacts of coronavirus on demand and planned maintenance shutdowns.
Fibers segment sales went down 5% year over year to $206 million. Acetate tow sales volumes were stable in the quarter. However, sales were impacted by lower volumes of textiles products due to the pandemic and reduced acetate tow selling prices.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $650 million, a more than three fold year-over-year increase. Net debt at the end of the quarter was $5,215 million, down around 13% year over year.
Eastman Chemical generated net cash from operating activities of $442 million and free cash flow of $360 million during the reported quarter.
The company also returned $90 million to its shareholders through dividends during the quarter.
Guidance
Eastman Chemical said that it entered the fourth quarter of 2020 with strong momentum. It expects adjusted earnings per share for the fourth quarter to be similar to fourth-quarter 2019 adjusted earnings per share of $1.42. The company also noted that it is on track to deliver roughly $150 million of cost savings for 2020 with around $40 million expected in the fourth quarter. It also expects to generate more than $1 billion of free cash flow this year.
Price Performance
Eastman Chemical’s shares have gained 7.7% over a year, outperforming the 1.8% decline of the industry it belongs to.
Zacks Rank & Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and B2Gold Corp. (BTG - Free Report) .
Agnico Eagle has a projected earnings growth rate of 102.1% for the current year. The company’s shares have gained around 28% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold has an expected earnings growth rate of 100% for the current year. The company’s shares have surged around 51% in the past year. It currently carries a Zacks Rank #2 (Buy).
B2Gold has a projected earnings growth rate of 250% for the current year. The company’s shares have shot up roughly 77% in a year. It currently carries a Zacks Rank #2.
Have You Seen Zacks’ 2020 Election Stock Report?
The upcoming election could be a massive buying opportunity for savvy investors. Trillions of dollars will shift into new market sectors after the election. The question is, which sectors will soar for each candidate? Zacks has put together a new special report to help readers like you target big profits.
The 2020 Election Stock Report reveals specific stocks you’ll want to own immediately after the results are announced – 6 if Trump wins, 6 if Biden wins. Past election reports have led investors to gains of +71%, +83%, even +185% in the following months. This year’s picks could be even more lucrative.
Check out Zacks’ 2020 Election Stock Report >>