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Eastman Chemical Company Reports Operating Results (10-Q)

October 31, 2012 | About:
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10qk

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Eastman Chemical Company (EMN) filed Quarterly Report for the period ended 2012-09-30.

Eastman Chemical Company has a market cap of $9.2 billion; its shares were traded at around $59.24 with a P/E ratio of 12.3 and P/S ratio of 1.3. The dividend yield of Eastman Chemical Company stocks is 1.7%. Eastman Chemical Company had an annual average earning growth of 6.1% over the past 10 years. GuruFocus rated Eastman Chemical Company the business predictability rank of 2-star.

Highlight of Business Operations:

Operating earnings were $263 million in third quarter 2012 compared with $271 million in third quarter 2011 and $844 million in first nine months 2012 compared with $918 million in first nine months 2011.

Operating earnings increased in third quarter 2012 compared to third quarter 2011 primarily due to $12 million from operating earnings of the acquired Solutia rubber materials product lines, which included $19 million of additional costs of acquired Solutia inventories. In addition, the increase was partially due to lower raw material and energy costs more than offsetting lower selling prices by $19 million and higher sales volume of $11 million.

Operating earnings increased in first nine months 2012 compared to first nine months 2011 primarily due to $12 million related to operating earnings of the acquired Solutia rubber materials product lines, including $19 million of additional costs of acquired Solutia inventories in first nine months 2012. In addition, the increase was partially due to lower raw material and energy costs more than offsetting lower selling prices by $19 million and higher sales volume of $11 million.

Operating earnings increased in first nine months 2012 compared to first nine months 2011 primarily due to higher earnings for intermediates product lines. Earnings in the United States were $55 million higher primarily due to the benefit of producing versus purchasing olefins. Earnings declined $29 million in Asia Pacific primarily due to lower selling prices attributed to weakened market demand particularly for olefin derivatives and $8 million in Europe attributed to weakened market demand and higher raw material and energy costs. Operating earnings in third quarter 2012 also included $2 million from operating earnings from the acquired Solutia specialty fluids product lines, which included $17 million in additional costs of acquired Solutia inventories. Operating earnings in third quarter 2011 included income from an acetyl technology license offset by costs from the unplanned outage of an olefin cracking unit, and $7 million in restructuring charges, primarily for severance associated with the acquisition and integration of Sterling.

Pro forma combined operating earnings increased in first nine months 2012 compared to first nine months 2011. Operating earnings for intermediates product lines were higher in the United States partially offset by lower earnings in Asia Pacific and Europe. Earnings in the United States were $55 million higher primarily due to the benefit of producing versus purchasing olefins. Earnings declined $29 million in Asia Pacific primarily due to lower selling prices attributed to weakened market demand particularly for olefin derivatives and $8 million in Europe attributed to weakened market demand and higher raw material and energy costs. Operating earnings from the specialty fluids product lines increased $18 million primarily driven by higher sales volumes and higher selling prices more than offsetting higher raw material and energy costs. Operating earnings in first nine months 2012 included $17 million of additional costs of acquired Solutia inventories. Operating earnings in first nine months 2011 included income from an acetyl technology license offset by costs from the unplanned outage of an olefin cracking unit, and $7 million in restructuring charges, primarily for severance associated with the acquisition and integration of Sterling.

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