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Kingsport, Tenn., USA, July 30, 2013 - (ACN Newswire) - Eastman Chemical Company (NYSE:EMN) today announced earnings, excluding the items described in Tables 3 and 4, of $1.80 per diluted share for second quarter 2013 versus $1.40 per diluted share for second quarter 2012. Reported earnings from continuing operations were $1.69 per diluted share in second quarter 2013 and $1.26 per diluted share in second quarter 2012. For detail of the excluded items and reconciliation to reported company and segment earnings, see Tables 3 and 4.
"The great progress we've made over the past several years to improve our portfolio, including the acquisition of Solutia, shows in the continuing strength of our earnings," said Jim Rogers, Chairman and CEO. "Second-quarter earnings were our best ever and position us for a fourth consecutive year of double-digit earnings growth. We continue to expect double-digit earnings growth through 2015 given our leading market positions, our end-market and geographic diversity, and the growth initiatives we are pursuing throughout the company." See "Outlook" paragraphs for items excluded from earnings comparisons.
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(In millions, except per share amounts) 2Q2013 2Q2012
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Sales revenue $2,440 $1,853
Pro forma combined sales revenue* $2,440 $2,373
Earnings per diluted share
from continuing operations $1.69 $1.26
Earnings per diluted share from continuing
operations excluding items** $1.80 $1.40
Net cash provided by operating activities $362 $316
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*See Table 2.
**For the excluded items and reconciliation to reported company
and segment earnings, see Tables 3 and 4.
Corporate 2Q 2013 versus 2Q 2012
Sales revenue for second quarter 2013 was $2.4 billion, a 32 percent increase compared with second quarter 2012. Second quarter 2013 included sales revenue from the acquired Solutia businesses. Pro forma combined sales revenue increased 3 percent due to higher sales volume across most segments.
Operating earnings in second quarter 2013 were $428 million compared with $317 million in second quarter 2012. Excluding the items described in Tables 3 and 4, operating earnings were $454 million in second quarter 2013 and $323 million in second quarter 2012. Second quarter 2013 included operating earnings from the acquired Solutia businesses. Pro forma combined operating earnings, excluding the items described in Tables 3 and 4, were $454 million in second quarter 2013 compared with $403 million in second quarter 2012. Pro forma combined operating earnings increased primarily due to higher sales volume across most segments and higher capacity utilization which led to lower unit costs. Operating earnings and pro forma combined operating earnings included the "Other" operating losses detailed in Table 3.
Segment Results 2Q 2013 versus 2Q 2012
Additives & Functional Products - Second quarter 2013 included sales revenue and operating earnings from the acquired Solutia rubber additives product lines. Pro forma combined sales revenue increased primarily due to higher sales volume. Higher sales volume in solvents product lines was attributed to strengthened coatings demand in the building and construction market. Second-quarter 2013 sales revenue included revenue from sales of certain products primarily sold into the tires market which were formerly reported in the Adhesives & Plasticizers segment. Pro forma combined operating earnings declined to $105 million in second quarter 2013 compared with $107 million in second quarter 2012.
Adhesives & Plasticizers - Sales revenue declined due to lower sales volume, primarily in adhesives resins, and lower selling prices in both plasticizers and adhesives resins. Lower sales volume in adhesives resins was primarily attributed to weakened demand in certain end markets including tapes, labels, and packaging, and customer destocking. This was partially offset by continued substitution of phthalate plasticizers with non-phthalate plasticizers. Lower selling prices for plasticizers were primarily attributed to competitive pressures resulting from continued weakened demand in Asia and Europe. Lower adhesives resins selling prices were primarily attributed to additional competitive pressure as industry supply increased attributed to improved availability of rosin resins and other key raw materials. Second-quarter 2012 sales revenue included revenue from sales of certain products primarily sold into the tires market which now are reported in the Additives & Functional Products segment. Operating earnings declined to $50 million in second quarter 2013 compared with $72 million in second quarter 2012 primarily due to both lower selling prices and lower sales volume.
Advanced Materials - Second quarter 2013 included sales revenue and operating earnings from the acquired Solutia interlayers and performance films product lines. Pro forma combined sales revenue increased due to higher sales volume for Eastman Tritan(TM) copolyester, higher sales volume for interlayers products attributed to strengthened demand in Asia and North America transportation markets, and higher sales volume for performance films products. Pro forma combined operating earnings increased to $81 million in second quarter 2013 compared with $63 million in second quarter 2012 primarily due to higher sales volume and increased sales of higher-margin products, including Eastman Tritan(TM) copolyester and V-Kool(R) brand window films, resulting in higher capacity utilization which led to lower unit costs.
Fibers - Sales revenue increased due to customer buying patterns for acetate tow products and higher selling prices in response to higher raw material and energy costs, particularly for wood pulp. Operating earnings increased to $116 million in second quarter 2013 compared with $96 million in second quarter 2012 due to higher selling prices.
Specialty Fluids & Intermediates - Second quarter 2013 included sales revenue and operating earnings from the acquired Solutia specialty fluids product lines. Pro forma combined sales revenue increased due to higher sales volume of olefin-based products primarily in the North America and Asia Pacific regions, and for specialty fluids products due to timing of customer project completions. Pro forma combined operating earnings increased to $118 million in second quarter 2013 compared with $97 million in second quarter 2012. The increase was primarily due to higher sales volume.
Cash Flow
Eastman generated $362 million in cash from operating activities during second quarter 2013, primarily due to strong net earnings. During second quarter 2013, the company reduced long-term borrowings by $100 million and repurchased shares totaling $46 million.
Outlook
Commenting on the outlook for full year 2013, Rogers said: "We expect our portfolio of specialty businesses to continue to deliver strong earnings despite slow global economic growth, reflecting our leadership positions in key end-markets, the diversity of the end-markets we serve, and our broad geographic footprint. As a result, we are increasing our expectations for 2013 earnings per share to between $6.40 and $6.50. We expect earnings in the second half of the year will be slightly lower than first half due to normal seasonality of sales volume." Solutia integration costs, asset impairments and restructuring charges, and mark-to-market pension and OPEB gains or losses are excluded from the earnings per share projections.
The earnings for 2012, 2011, 2010, and 2009 referenced in the second paragraph of this release are non-GAAP and exclude Solutia acquisition-related costs, asset impairments and restructuring charges and gains, mark-to-market pension and OPEB gains and losses, and early debt extinguishment costs. Reconciliations to 2012, 2011, 2010, and 2009 GAAP earnings and other associated disclosures, including descriptions of the excluded items, are available in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the company's Annual Reports on Form 10-K for 2012 and 2011.
Eastman will host a conference call with industry analysts on July 30 at 8:00 a.m. EDT. 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 +1-913-312-1391, passcode number 4214451. 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. EDT, July 30, to 11:00 a.m. EDT, August 9, at +1-888-203-1112 or +1-719-457-0820, passcode 4214451.
Forward-Looking Statements: This news release includes forward-looking statements concerning current expectations for global economic conditions; sales volume; benefits, costs and charges, and integration of the Solutia acquisition and of the acquired Solutia businesses and of other growth initiatives; asset impairments and restructuring charges and mark-to-market pension and OPEB gains and losses; and company, segment, and acquired Solutia businesses earnings in second half and full year 2013 and future years. 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 2012 available, and the Form 10-Q to be filed for second quarter 2012 and to be available, on the Eastman web site at www.eastman.com in the Investors, SEC information 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 2012 pro forma combined revenues, giving effect to the Solutia acquisition, of approximately $9.1 billion. The company is headquartered in Kingsport, Tenn., and employs approximately 14,000 people around the world. For more information, visit www.eastman.com .
Contacts:
Media:
Tracy Kilgore
+1-423-224-0498 / tjkilgore@eastman.com
Investors:
Greg Riddle
+1-212-835-1620 / griddle@eastman.com
2Q 2013 Financial Tables: http://hugin.info/150386/R/1719631/572352.pdf
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Eastman Chemical Company via Thomson Reuters ONE
Topic: Earnings
Source: Eastman Chemical Company
http://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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