KINGSPORT, Tenn., July 28,
2014 - Eastman Chemical Company (NYSE:EMN) today announced
earnings from continuing operations, excluding non-core or
non-recurring items, of $1.92 per diluted share for second quarter
2014 versus $1.80 per diluted share for second quarter 2013.
Reported earnings from continuing operations were $1.92 per diluted
share for second quarter 2014 versus $1.69 per diluted share for
second quarter 2013. For detail of the excluded items and
reconciliation to reported company and segment earnings, see Tables
3 and 4.
"We delivered solid results across our portfolio
in the second quarter despite a number of challenges," said Mark
Costa, chairman and CEO. "We continue to focus on growth through
Eastman-specific actions, including serving growing markets with
capacity additions, improving our mix with higher-value products,
and disciplined capital allocation. As a result, Eastman remains
well positioned for a fifth consecutive year of strong earnings
growth." See the second paragraph under "Outlook" for the items
excluded from annual earnings comparisons.
(In millions, except per share amounts) |
2Q2014 |
2Q2013 |
Sales
revenue
|
$2,460 |
$2,440 |
Earnings
per diluted share from continuing
operations*
|
$1.92 |
$1.69 |
Earnings
per diluted share from continuing operations
excluding non-core or non-recurring items**
|
$1.92 |
$1.80 |
Net cash
provided by operating activities
|
$419 |
$362 |
*For a description of
earnings from discontinued operations, see Table
1.
**For reconciliation to reported company and
segment earnings, see Tables 3 and 4.
Corporate
results 2Q 2014 versus 2Q 2013
Sales revenue was $2.5 billion, a slight increase
compared with second quarter 2013. Operating earnings for second
quarter 2014 were $436 million compared with $428 million for
second quarter 2013. Excluding the items described in Tables 3 and
4, second-quarter 2014 operating earnings were $441 million
compared with $454 million for second quarter 2013, with the
decline primarily due to lower Specialty Fluids & Intermediates
segment earnings. The previously announced unplanned shutdown at
the Kingsport, Tenn., facility negatively impacted second-quarter
2014 operating earnings by approximately $10 million.
Segment results 2Q 2014
versus 2Q 2013
Additives & Functional
Products - Sales revenue increased primarily due to higher
sales volume for coatings product lines attributed to strengthened
demand, particularly in key end markets. Excluding non-core or
non-recurring items, operating earnings declined slightly primarily
due to higher raw material and energy costs, particularly for
propane, partially offset by higher sales volume.
Adhesives & Plasticizers
- Sales revenue increased primarily due to higher sales
volume more than offsetting lower selling prices. Higher sales
volume for adhesives resins was mostly attributed to stronger
end-market demand and customer inventory destocking that negatively
impacted second quarter 2013. Higher sales volume for plasticizers
was primarily attributed to the timing of substitution of phthalate
plasticizers with Eastman non-phthalate plasticizers. Lower selling
prices were primarily due to continued competitive pressure
attributed to increased adhesives resins supply and weakened
plasticizers demand in Asia Pacific and Europe. Excluding non-core
or non-recurring items in second quarter 2013, operating earnings
increased primarily due to higher sales volume, higher capacity
utilization that resulted in lower unit costs, and lower operating
costs that included targeted cost reductions, partially offset by
lower selling prices.
Advanced Materials
- Sales revenue increased slightly as higher sales volume
for premium products such as interlayers with acoustic properties
and Eastman TritanTM copolyester
was mostly offset by lower sales volume for core products such as
Flexvue® coated
films. Excluding non-core or non-recurring items in the
second quarter 2013, operating earnings for second quarter 2014
were relatively unchanged compared to second quarter 2013, as lower
raw material and energy costs and improved product mix were offset
by costs of the unplanned shutdown at the Kingsport site and other
costs.
Fibers - Sales
revenue increased due to higher selling prices and sales of acetate
flake to Eastman's China acetate tow joint venture more than
offsetting lower acetate tow sales volume. The lower acetate
tow sales volume was primarily due to additional industry capacity
including the acetate tow joint venture. Operating earnings
increased as higher selling prices, sales of acetate flake to the
China joint venture, and lower raw material and energy costs more
than offset lower acetate tow sales volume and higher operating
costs. The higher operating costs were the result of lower capacity
utilization that resulted in higher unit costs and costs related to
the unplanned shutdown at the Kingsport site.
Specialty Fluids &
Intermediates - Sales revenue declined partly due to
a decrease in sales volume resulting from the first-quarter
weather-related outage at the Longview, Texas site and the
second-quarter unplanned shutdown at the Kingsport site. Sales
revenue was also negatively impacted by lower sales volume for
intermediates product lines resulting from increased use of
intermediates in the manufacture of higher-value downstream
derivatives in other segments. Selling prices and sales volume for
acetyl-based product lines increased compared to second quarter
2013. Excluding non-core or non-recurring items, operating earnings
decreased primarily due to lower sales volume, higher raw material
and energy costs, particularly for propane, and costs of the
unplanned shutdown at the Kingsport site.
Cash Flow
Eastman generated $419 million in cash from
operating activities during second quarter 2014 primarily due to
strong net earnings. During the quarter, the company completed
the acquisition of the aviation turbine oil business from BP plc,
which is now a part of the Specialty Fluids & Intermediates
segment, and repurchased shares for a total of $100 million. In
addition, the company issued $500 million of 30-year public debt at
an interest rate of 4.65%, with proceeds to be used for general
corporate purposes.
Outlook
Commenting on the outlook for full year 2014,
Costa said, "We delivered solid earnings in the first half of the
year despite a number of headwinds. Looking forward, we remain
confident in our ability to generate strong year over year earnings
growth. As a result, we continue to expect 2014 earnings per share
to be between $6.70 and $7.00." Non-core and non-recurring items
are excluded from the earnings per share projection.
The earnings for 2013, 2012, 2011, 2010, and 2009
referenced in the second paragraph of this release are non-GAAP and
exclude the non-core or non-recurring items detailed, with
reconciliation to GAAP earnings, in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
sections of the company's Annual Reports on Form 10-K for 2013,
2012, and 2011.
Eastman will host a conference call with industry
analysts on July 29, 2014 at 8:00 a.m. ET. To listen to the
live webcast of the conference call and view the accompanying
slides, go to www.investors.eastman.com, Events &
Presentations. To listen via telephone, the dial-in number is
913-312-0690, passcode number 1629560. A web replay, a replay
in downloadable MP3 format, and the accompanying slides will be
available at www.investors.eastman.com, Events &
Presentations. A telephone replay will be available
continuously from 11:00 a.m. ET, July 29, to 11:00 a.m. ET, August
5, at 888-203-1112 or 719-457-0820, passcode 1629560.
Forward-Looking
Statements: This news release includes forward-looking
statements concerning current expectations for future global and
regional economic conditions; company manufacturing capacity
additions, mix of products sold, and capital expenditures,
acquisitions, debt, dividends, and stock repurchases; non-core or
non-recurring costs, charges, income, and gains; and company and
segment revenue, earnings, and cash flow for full year
2014. Such expectations are based upon certain preliminary
information, internal estimates, and management assumptions,
expectations, and plans, and are subject to a number of risks and
uncertainties inherent in projecting future conditions, events, and
results. Actual results could differ materially from
expectations expressed in the forward-looking statements if one or
more of the underlying assumptions or expectations prove to be
inaccurate or are unrealized. Important factors that could cause
actual results to differ materially from such expectations are and
will be detailed in the company's filings with the Securities and
Exchange Commission, including the Form 10-Q filed for first
quarter 2014 available, and the Form 10-Q to be filed for second
quarter 2014 and to be available, on the Eastman web site at
www.eastman.com in the Investors, SEC filings section.
Eastman is a global specialty chemical company
that produces a broad range of products found in items people use
every day. With a portfolio of specialty businesses, Eastman works
with customers to deliver innovative products and solutions while
maintaining a commitment to safety and sustainability. Its
market-driven approaches take advantage of world-class technology
platforms and leading positions in attractive end-markets such as
transportation, building and construction and consumables. Eastman
focuses on creating consistent, superior value for all
stakeholders. As a globally diverse company, Eastman serves
customers in approximately 100 countries and had 2013 revenues of
approximately $9.4 billion. The company is headquartered in
Kingsport, Tennessee, USA and employs approximately 14,000 people
around the world. For more information, visit www.eastman.com.
# # #
Contacts:
Media: Tracy Kilgore
423-224-0498 / tjkilgore@eastman.com
Investors: Greg Riddle
212-835-1620 / griddle@eastman.com
Q2 2014 Financial Tables
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Eastman Chemical Company via Globenewswire
HUG#1840850
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