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Eastman's (EMN) Earnings and Sales Surpass Estimates in Q4
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Eastman Chemical Company (EMN - Free Report) recorded a fourth-quarter 2023 profit of $310 million or $2.61 per share compared with $1 million or a penny per share in the year-ago quarter.
Barring one-time items, earnings were $1.31 per share, up from 89 cents in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.28.
Revenues declined around 7% year over year to $2,207 million in the quarter. The figure beat the Zacks Consensus Estimate of $2,166.7 million. Lower sales volumes due to weak end-market demand and sustained customer inventory destocking in some end industries, notably agriculture and medical and lower selling prices due to reduced raw material prices, weighed on the top line.
Eastman Chemical Company Price, Consensus and EPS Surprise
Revenues from the Additives and Functional Products division declined 15.3% year over year to $640 million in the reported quarter. Lower selling prices were generally the result of cost-pass-through agreements. Sales volume was lower due to poor demand, particularly in the building and construction end markets, timing for some heat transfer fluid fills and aggressive customer inventory destocking in the agriculture end market. The figure was higher than our estimate of $606.7 million.
Revenues from the Advanced Materials unit declined 4.2% year over year to $705 million. Lower sales volume was triggered by sustained weak end-market demand and destocking in key end sectors, including medical, packaging and building and construction, which was partly offset by continued success in automotive. The figure was lower than our estimate of $748.9 million.
Chemical Intermediates sales fell 9% year over year to $513 million. Lower selling prices across the segment were mostly due to lower raw material costs and weak end-market demand. The figure was higher than our estimate of $438.5 million.
Fibers segment sales increased 9.1% year over year to $346 million. Lower sales volume and mix were more than offset by significantly higher selling prices for acetate tow. This was lower than our estimate of $378 million.
FY2023 Results
Adjusted earnings for full-year 2023 were $6.40 per share compared with $7.88 a year ago. Net sales decreased 12.9% year over year to $9,210 million.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $548 million, a roughly 11.1% year-over-year rise. Net debt at the end of the quarter was $4,298 million, declining around 7.7%.
Operating cash flow was $452 million, down from $457 million in the prior-year quarter.
Guidance
The company stated that it expects volume increase due to the absence of client inventory destocking in its end markets, with the notable exception of medical and agriculture, which will continue to destock in the first quarter of 2024.
EMN anticipates minor primary demand increase in several stable end industries, with discretionary end markets remaining steady. It expects to gain from the revenues and earnings generated by its Kingsport methanolysis facility. Taking all of this into account, the company expects 2024 EPS to range between $7.25 and $8.00, with cash from operations of around $1.4 billion.
Price Performance
Eastman Chemical’s shares have lost 6% over a year compared with a 19.5% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Eastman currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include, Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
Cameco, carrying a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% in the past 60 days. The stock is up around 66.6% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 23.7% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 144.6% in a year.
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Eastman's (EMN) Earnings and Sales Surpass Estimates in Q4
Eastman Chemical Company (EMN - Free Report) recorded a fourth-quarter 2023 profit of $310 million or $2.61 per share compared with $1 million or a penny per share in the year-ago quarter.
Barring one-time items, earnings were $1.31 per share, up from 89 cents in the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.28.
Revenues declined around 7% year over year to $2,207 million in the quarter. The figure beat the Zacks Consensus Estimate of $2,166.7 million. Lower sales volumes due to weak end-market demand and sustained customer inventory destocking in some end industries, notably agriculture and medical and lower selling prices due to reduced raw material prices, weighed on the top line.
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 15.3% year over year to $640 million in the reported quarter. Lower selling prices were generally the result of cost-pass-through agreements. Sales volume was lower due to poor demand, particularly in the building and construction end markets, timing for some heat transfer fluid fills and aggressive customer inventory destocking in the agriculture end market. The figure was higher than our estimate of $606.7 million.
Revenues from the Advanced Materials unit declined 4.2% year over year to $705 million. Lower sales volume was triggered by sustained weak end-market demand and destocking in key end sectors, including medical, packaging and building and construction, which was partly offset by continued success in automotive. The figure was lower than our estimate of $748.9 million.
Chemical Intermediates sales fell 9% year over year to $513 million. Lower selling prices across the segment were mostly due to lower raw material costs and weak end-market demand. The figure was higher than our estimate of $438.5 million.
Fibers segment sales increased 9.1% year over year to $346 million. Lower sales volume and mix were more than offset by significantly higher selling prices for acetate tow. This was lower than our estimate of $378 million.
FY2023 Results
Adjusted earnings for full-year 2023 were $6.40 per share compared with $7.88 a year ago. Net sales decreased 12.9% year over year to $9,210 million.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $548 million, a roughly 11.1% year-over-year rise. Net debt at the end of the quarter was $4,298 million, declining around 7.7%.
Operating cash flow was $452 million, down from $457 million in the prior-year quarter.
Guidance
The company stated that it expects volume increase due to the absence of client inventory destocking in its end markets, with the notable exception of medical and agriculture, which will continue to destock in the first quarter of 2024.
EMN anticipates minor primary demand increase in several stable end industries, with discretionary end markets remaining steady. It expects to gain from the revenues and earnings generated by its Kingsport methanolysis facility. Taking all of this into account, the company expects 2024 EPS to range between $7.25 and $8.00, with cash from operations of around $1.4 billion.
Price Performance
Eastman Chemical’s shares have lost 6% over a year compared with a 19.5% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Eastman currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include, Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
Cameco, carrying a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% in the past 60 days. The stock is up around 66.6% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 23.7% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 144.6% in a year.