Eastman Chemical Earnings: Margins Shrink on Rising Costs, Net Income Falls

Rising costs hurt S&P 500 (NYSE:SPY) component Eastman Chemical Co. (NYSE:EMN) in the third quarter as profit dropped from a year earlier. Eastman Chemical is a global company which manufactures and sells chemicals, plastics, and fibers products to customers in seven countries.

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Eastman Chemical Co. Earnings Cheat Sheet

Results: Net income for Eastman Chemical Co. fell to $154 million (99 cents per share) vs. $174 million ($1.22 per share) a year earlier. This is a decline of 11.5% from the year-earlier quarter.

Revenue: Rose 24.7% to $2.26 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Eastman Chemical Co. fell short of the mean analyst estimate of $1.42 per share. It beat the average revenue estimate of $1.86 billion.

Quoting Management: “Our record performance after the Solutia acquisition reaffirms our confidence that we will continue to deliver year-over-year earnings growth,” said Jim Rogers, chairman and CEO. “Results were solid throughout the company, demonstrating the strength and diversity of our businesses in what remains a challenging global economic environment. Cash generation was also strong in the quarter, and we are on track to generate strong free cash flow for years to come.”

Key Stats:

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 6 cents, and in the first quarter, it was ahead by 8 cents.

Over the last five quarters, revenue has increased 28% on average year-over-year. The biggest increase came in the fourth quarter of the last fiscal year, when revenue rose more than twofold from the year-earlier quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is $1.22 per share, up from $1.17 ninety days ago. For the fiscal year, the average estimate has moved up from $5.20 a share to $5.26 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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