Eastman Chemical (EMN) Q2 Earnings: What's In The Cards?
Zacks Investment Research | Jul 25, 2017 05:05AM ET
Eastman Chemical Company (NYSE:EMN) is set to release second-quarter 2017 results after closing the bell on Jul 27.
Eastman Chemical witnessed higher profits on a reported basis in first-quarter 2017, aided by its aggressive cost management actions, disciplined capital allocation and growth of high-margin products. The chemical maker recorded earnings of $278 million or $1.89 per share in the first quarter, up from the year-ago figure of $251 million or $1.69.
Barring one-time items, earnings were $1.83 per share for the quarter, up from $1.71 in the year ago-quarter. Earnings topped the Zacks Consensus Estimate of $1.74 per share.
Revenues rose around 2.9% year over year to $2,303 million in the first quarter, beating the Zacks Consensus Estimate of $2,241 million.
Eastman Chemical topped the Zacks Consensus Estimate in three of the trailing four quarters with an average beat of 4.21%.
Eastman Chemical stock has gained 5.4% in the last three months, outperforming the 3.1% gain of the industry it belongs to.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Eastman Chemical, in its last earnings call, announced that it expects growth to be driven by innovation and high margin products, amid uncertain global business environment. The company believes that disciplined capital allocation and aggressive cost management policies should contribute to earnings growth and offset challenges faced by the company in Fibers segment. In 2017, the company expects adjusted earnings per share to grow 8–12%.
Earnings for the company’s Advanced Materials unit in the first quarter increased owing to strong sales volume growth, better product mix of premium products and fixed cost leverage that more than offset higher raw material energy costs and modestly lower selling prices. Also, the company witnessed an increase in operating margin in the quarter amid an environment of raw materials inflation and unfavorable currency.
The Additives & Functional Products segment witnessed modest increase in operating earnings in the quarter as improved sales volume was mostly offset by higher raw material and energy costs, lower selling prices and unfavorable currency.
Eastman Chemical remains focused on cost cutting and productivity actions amid a challenging operating environment. Further, the company should gain from its strategic acquisitions (especially Taminco Corporation) and capacity expansion actions. The company also remains committed to reduce debt and boost shareholders return by leveraging healthy free cash flows.
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