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S&P 500 (NYSE:SPY) component Eastman Chemical (NYSE:EMN) will unveil its latest earnings on Thursday, October 25, 2012. Eastman Chemical is a global company which manufactures and sells chemicals, plastics, and fibers products to customers in seven countries.
Eastman Chemical Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.42 per share, a rise of 19.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.46. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.42 during the last month. For the year, analysts are projecting net income of $5.26 per share, a rise of 15.4% from last year.
Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 6 cents, reporting profit of $1.40 per share against a mean estimate of net income of $1.34. In the first quarter, the company exceeded forecasts by 8 cents with profit of $1.22 versus a mean estimate of net income of $1.14.
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Wall St. Revenue Expectations: Analysts predict a rise of 30.4% in revenue from the year-earlier quarter to $2.36 billion.
A Look Back: In the second quarter, profit fell 15.2% to $179 million ($1.27 a share) from $211 million ($1.46 a share) the year earlier, but exceeded analyst expectations. Revenue fell 1.7% to $1.85 billion from $1.89 billion.
Stock Price Performance: Between July 26, 2012 and October 19, 2012, the stock price rose $6.49 (13.1%), from $49.59 to $56.08. The stock price saw one of its best stretches over the last year between January 4, 2012 and January 12, 2012, when shares rose for seven straight days, increasing 15% (+$6) over that span. It saw one of its worst periods between May 7, 2012 and May 18, 2012 when shares fell for 10 straight days, dropping 13.6% (-$6.99) over that span.
On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 4.8% in the third quarter of the last fiscal year, more than twofold in the fourth quarter of the last fiscal year and 3.6%in the first quarter before dropping in the second quarter.
The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 28.2% in the first quarter and then again in the second quarter.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 5.15 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.
Analyst Ratings: With eight analysts rating the stock a buy, none rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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