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.”
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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