Eastman Chemical Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Eastman Chemical (NYSE:EMN) will unveil its latest earnings tomorrow, Thursday, January 31, 2013. 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 net income of $1.19 per share, a rise of 67.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.20. Between one and three months ago, the average estimate moved down. It has risen from $1.18 during the last month. Analysts are projecting profit to rise by 18% versus last year to $5.38.

Past Earnings Performance: Last quarter, the company reported profit of $1.57 per share versus a mean estimate of net income of. The company has beaten estimates for the past three quarters.

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Wall St. Revenue Expectations: On average, analysts predict $2.24 billion in revenue this quarter, a rise of 30.2% from the year-ago quarter. Analysts are forecasting total revenue of $8.18 billion for the year, a rise of 13.9% from last year’s revenue of $7.18 billion.

Here’s how Eastman Chemical traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

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Stock Price Performance: Between November 27, 2012 and January 25, 2013, the stock price had risen $12.86 (21.8%), from $59.03 to $71.89. 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. The stock price saw one of its best stretches over the last year between December 11, 2012 and December 18, 2012, when shares rose for six straight days, increasing 6.8% (+$4.23) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.83 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 5.15 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 62.8% to $1.46 billion while assets decreased 42.3% to $2.67 billion.

Key Stats:

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 28.2% in the first quarter, by 15.2% in the second quarter and again in the third quarter.

On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 1.7% in the second quarter after increasing in the third quarter.

A Look Back: In the third quarter, profit fell 6.7% to $154 million (99 cents a share) from $165 million ($1.16 a share) the year earlier, but exceeded analyst expectations. Revenue rose 24.7% to $2.26 billion from $1.81 billion.

Analyst Ratings: With 10 analysts rating the stock a buy, none rating it a sell and four 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)