Eastman Chemical Company
EMN
recorded profits of $32 million or 23 cents per share for the fourth quarter of 2020, up from the year-ago profit of $26 million or 19 cents per share.
Barring one-time items, earnings were $1.69 per share for the quarter, up from $1.42 in the year ago-quarter. Earnings trounced the Zacks Consensus Estimate of $1.53.
Revenues dropped around 1% year over year to $2,186 million in the quarter. It surpassed the Zacks Consensus Estimate of $2,142 million.
The company gained from its innovation-driven growth model and cost-management actions in the reported quarter.
Eastman Chemical Company Price, Consensus and EPS Surprise
Eastman Chemical Company price-consensus-eps-surprise-chart
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Eastman Chemical Company Quote
Segment Review
Revenues from the Additives and Functional Products division edged up 1% year over year to $773 million for the reported quarter, aided by higher volumes and mix growth that offset lower pricing. The company saw double-digit growth in coatings additives on higher demand in the transportation end market and strong demand in building and construction.
Revenues from the Advanced Materials unit rose 6% year over year to $674 million. The increase can be attributed to higher volumes and mix growth. The company saw revenue growth across all businesses. Pricing fell due to lower raw material prices.
Chemical Intermediates sales dropped 8% year over year to $531 million, hurt by lower selling prices, volumes and mix. Lower raw material and energy prices impacted selling prices. Volumes fell due to maintenance shutdowns and the discontinuation of specific product lines at the company’s Singapore facility.
Fibers segment sales went down 8% year over year to $208 million on lower volumes, prices and mix. Acetate tow sales volumes were stable in the quarter. Volumes fell due to softness in the textiles end market as a result of the coronavirus pandemic.
FY20 Results
Earnings (as reported) for full-year 2020 were $3.50 per share, down from $5.48 per share a year ago. Adjusted earnings per share were $6.15 for 2020, down from $7.13 a year ago.
Net sales dropped around 9% year over year to $8,473 million for the full year. Sales fell due to the impacts of the pandemic on the global economy and demand for some of the company’s products.
Financials
Eastman Chemical ended 2020 with cash and cash equivalents of $564 million, a nearly three fold year-over-year increase. Net debt at the end of the year was $5,054 million, down around 9% year over year.
Eastman Chemical generated cash from operating activities of $1.5 billion and free cash flow of $1.1 billion in 2020.
The company also returned $418 million to its shareholders through dividends and share repurchases during the year.
Guidance
Eastman Chemical said that it still faces uncertainties associated with the pandemic as it moves ahead and remains focused on disciplined capital allocation, growing new business revenues and aggressively managing costs.
The company expects adjusted earnings per share for 2021 to be 20-30% higher than the 2020 level. It also expects to generate more than $1 billion of free cash flow.
Price Performance
Eastman Chemical’s shares have gained 41.1% over a year, outperforming the 19.1% rise of the
industry
it belongs to.
Zacks Rank & Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include
Fortescue Metals Group Limited
FSUGY
,
Impala Platinum Holdings Limited
IMPUY
and
BHP Group
BHP
.
Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 129% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 44% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 31% in a year. It currently carries a Zacks Rank #1.
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