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Eastman Chemical (EMN) Q4 Earnings, Revenues Beat Estimates
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Eastman Chemical (EMN - Free Report) saw higher profits on a reported basis in the fourth quarter of 2016, aided by its cost management actions and growth of its high-margin products. The chemical maker recorded profit (as reported) of $128 million or 87 cents per share, up from $124 million or 83 cents per share recorded a year ago.
Barring one-time items, earnings were $1.51 per share for the quarter, down from $1.59 per share in the year ago-quarter. Earnings, however, topped the Zacks Consensus Estimate of $1.48.
Revenues fell around 2% year over year to $2,188 million in the quarter, but beat the Zacks Consensus Estimate of $2,151 million. The decline was mainly due to lower prices and reduced Fibers sales volume that more than offset higher sales volume in other segments.
For full-year 2016, the company posted profit of $866 million or $5.84 per share, up from $848 million or $5.66 per share in 2015.
Revenues for the full year fell roughly 7% year over year to $9,008 million.
Eastman Chemical Company Price, Consensus and EPS Surprise
Revenues from the Additives and Functional Products division went down 2% year over year to $720 million in the reported quarter. The decline was mainly due to lower selling prices as a result of reduced raw material and energy costs.
Revenues from the Advanced Materials unit was flat year over year at $584 million as higher sales volume of premium products offset lower selling prices due to reduced raw material and energy costs.
Chemical Intermediates sales rose 10% to $643 million on the back of higher sales volume of olefin-based and functional amines products.
Fibers segment sales slid 27% to $230 million due to reduced sales volume and lower selling prices, in particular, for acetate tow.
Financials
Eastman Chemical ended 2016 with cash and cash equivalents of $181 million, down roughly 38% year over year. Total debt fell roughly 6% year over year to $6.6 billion. Eastman Chemical generated operating cash flows of $1.4 billion for 2016. The company returned $417 million to shareholders through $272 million of dividends and $145 million of share repurchases in 2016.
Outlook
Moving ahead, Eastman Chemical said that it should gain from its strong portfolio of specialty businesses and growth of its high-value specialty products amid an uncertain global operating environment. The company sees adjusted earnings per share growth for 2017 to be 8%-12%.
Eastman Chemical has outperformed the Zacks categorized Chemicals-Diversified industry over the past three months. The company’s shares have gained around 19.6% over this period, compared with roughly 13.4% gain recorded by the industry.
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Eastman Chemical (EMN) Q4 Earnings, Revenues Beat Estimates
Eastman Chemical (EMN - Free Report) saw higher profits on a reported basis in the fourth quarter of 2016, aided by its cost management actions and growth of its high-margin products. The chemical maker recorded profit (as reported) of $128 million or 87 cents per share, up from $124 million or 83 cents per share recorded a year ago.
Barring one-time items, earnings were $1.51 per share for the quarter, down from $1.59 per share in the year ago-quarter. Earnings, however, topped the Zacks Consensus Estimate of $1.48.
Revenues fell around 2% year over year to $2,188 million in the quarter, but beat the Zacks Consensus Estimate of $2,151 million. The decline was mainly due to lower prices and reduced Fibers sales volume that more than offset higher sales volume in other segments.
For full-year 2016, the company posted profit of $866 million or $5.84 per share, up from $848 million or $5.66 per share in 2015.
Revenues for the full year fell roughly 7% year over year to $9,008 million.
Eastman Chemical Company Price, Consensus and EPS Surprise
Eastman Chemical Company Price, Consensus and EPS Surprise | Eastman Chemical Company Quote
Segment Review
Revenues from the Additives and Functional Products division went down 2% year over year to $720 million in the reported quarter. The decline was mainly due to lower selling prices as a result of reduced raw material and energy costs.
Revenues from the Advanced Materials unit was flat year over year at $584 million as higher sales volume of premium products offset lower selling prices due to reduced raw material and energy costs.
Chemical Intermediates sales rose 10% to $643 million on the back of higher sales volume of olefin-based and functional amines products.
Fibers segment sales slid 27% to $230 million due to reduced sales volume and lower selling prices, in particular, for acetate tow.
Financials
Eastman Chemical ended 2016 with cash and cash equivalents of $181 million, down roughly 38% year over year. Total debt fell roughly 6% year over year to $6.6 billion. Eastman Chemical generated operating cash flows of $1.4 billion for 2016. The company returned $417 million to shareholders through $272 million of dividends and $145 million of share repurchases in 2016.
Outlook
Moving ahead, Eastman Chemical said that it should gain from its strong portfolio of specialty businesses and growth of its high-value specialty products amid an uncertain global operating environment. The company sees adjusted earnings per share growth for 2017 to be 8%-12%.
Eastman Chemical has outperformed the Zacks categorized Chemicals-Diversified industry over the past three months. The company’s shares have gained around 19.6% over this period, compared with roughly 13.4% gain recorded by the industry.
Eastman Chemical is a Zacks Rank #3 (Hold) stock.
Stocks to Consider
Better-ranked companies in the chemical space include BASF SE (BASFY - Free Report) , Methanex Corporation (MEOH - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BASF has an expected long-term growth of 7.7%.
Methanex has an expected long-term growth of 15%.
Kronos has an expected long-term growth of 5%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>