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Kingsport, Tenn., USA, Oct 25, 2013 - (ACN Newswire) - Eastman Chemical Company (NYSE:EMN) today announced earnings, excluding the non-core or non-recurring items described in Tables 3 and 4, of $1.68 per diluted share for third quarter 2013 versus $1.57 per diluted share for third quarter 2012. Reported earnings were $1.97 per diluted share in third quarter 2013 and $0.99 per diluted share in third quarter 2012. For detail of the excluded items and reconciliation to reported company and segment earnings, see Tables 3 and 4.
"Our solid third-quarter earnings keep us on track for a fourth consecutive year of double-digit earnings growth despite continued global economic uncertainty and volatile raw material and energy costs," said Jim Rogers, chairman and CEO. "Cash generation was also strong in the quarter, and we expect to continue to generate strong free cash flow for years to come." See "Outlook" paragraphs for items excluded from earnings comparisons and Table 5A for reconciliation of cash from operations to free cash flow.
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(In millions, except per share amounts) 3Q2013 3Q2012
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Sales revenue $2,338 $2,259
Earnings per diluted share $1.97 $0.99
Earnings per diluted share excluding
non-core or non-recurring items* $1.68 $1.57
Net cash provided by operating activities $427 $353
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* For reconciliation to reported company and segment earnings, see Tables 3 and 4 in the accompanying third-quarter 2013 financial tables.
Corporate Results - 3Q 2013 versus 3Q 2012
Sales revenue for third quarter 2013 was $2.3 billion, a 3 percent increase compared with third quarter 2012 due primarily to higher sales volume in the Additives & Functional Products and Advanced Materials segments, partially offset by lower sales revenue in the Adhesives & Plasticizers segment.
Operating earnings in third quarter 2013 were $479 million compared to $263 million in third quarter 2012. Excluding the items described in Tables 3 and 4, third-quarter 2013 operating earnings were $405 million compared to $397 million in third quarter 2012. Operating earnings included the "Other" operating losses detailed in Table 3.
Segment Results - 3Q 2013 versus 3Q 2012
Additives & Functional Products - Sales revenue increased primarily due to higher sales volume of solvents product lines attributed to strengthened coatings demand in the building and construction market supported by recent capacity additions at the Longview, Texas facility. Higher sales revenue was also the result of higher sales volume for cellulosic polymers and Crystex(R) insoluble sulfur, both attributed to increased demand in the transportation market. Third-quarter 2013 sales revenue included revenue from sales of certain products sold primarily into the tires market which were previously reported in the Adhesives & Plasticizers segment. Third-quarter 2012 operating earnings included $19 million of additional costs of acquired Solutia inventories. Excluding these costs, operating earnings increased to $111 million in third quarter 2013 compared with $105 million in third quarter 2012. The increase was primarily due to higher sales volume partially offset by higher raw material and energy costs, particularly for propane.
Adhesives & Plasticizers - Sales revenue declined primarily due to lower selling prices in both adhesives resins and plasticizers product lines and lower sales volume in adhesives resins product lines. Lower adhesives resins selling prices were attributed primarily to increased competitive pressure due to greater industry supply attributed to increased availability of key raw materials and additional competitor capacity. Lower selling prices for plasticizers were primarily attributed to competitive pressures resulting from continued weakened demand in Asia Pacific and Europe. Sales volume declined primarily due to sales of certain products primarily sold into the tires market now being reported in the Additives & Functional Products segment, partially offset by continued substitution of phthalate plasticizers with non-phthalate plasticizers. Operating earnings declined to $41 million in third quarter 2013 compared with $73 million in third quarter 2012 primarily due to lower selling prices, higher raw material and energy costs, lower adhesives resins sales volume and an unfavorable shift in regional mix due to relatively lower sales in North America of adhesives resins product lines.
Advanced Materials - Sales revenue increased primarily due to higher sales volume for Eastman Tritan(TM) copolyester. Third-quarter 2012 operating earnings included $39 million of additional costs of acquired Solutia inventories. Excluding these costs, operating earnings increased to $69 million in third quarter 2013 compared with $57 million in third quarter 2012 due to higher sales volume and higher capacity utilization which led to lower unit costs, attributed to increased demand for specialty plastics products, including Eastman Tritan(TM) copolyester.
Fibers - Sales revenue increased due to higher selling prices in response to higher raw material and energy costs, particularly for wood pulp. Operating earnings increased to $113 million in third quarter 2013 compared with $98 million in third quarter 2012 due to higher selling prices.
Specialty Fluids & Intermediates - Sales revenue increased primarily due to higher sales volume of olefin-based products sold into Asia Pacific and higher selling prices for several product lines. Third-quarter 2012 operating earnings included $17 million of additional costs of acquired Solutia inventories. Excluding these costs, operating earnings decreased to $90 million in third quarter 2013 compared with $96 million in third quarter 2012. The decrease was primarily due to higher raw material and energy costs more than offsetting higher selling prices.
Provision for Income Taxes
Excluding the tax impact of non-core or non-recurring items, the third-quarter 2013 effective tax rate was 27 percent compared to 31 percent for third quarter 2012. The third quarter 2013 effective tax rate was lower primarily due to a benefit for adjustments to the tax provision to reflect the finalization of the 2012 consolidated U.S. federal income tax return.
Cash Flow
Eastman generated $427 million in cash from operating activities during third-quarter 2013, primarily due to strong net earnings. During the quarter the company reduced long-term borrowings by $250 million and repurchased shares totaling $35 million.
Outlook
Commenting on the outlook for full year 2013, Rogers said: "Our businesses have delivered strong results to date, and we expect that to continue in the fourth quarter. However, the fourth quarter is normally seasonally slower and the pace of global economic growth is uncertain. We also anticipate continued challenges in the Adhesives & Plasticizers segment as well as higher raw material and energy costs. We are therefore adjusting our full year 2013 expectation for earnings per share to between $6.30 and $6.40." Solutia transaction and integration costs and charges, asset impairments and restructuring charges, and mark-to-market pension and OPEB gains and losses are excluded from the earnings per share projection.
The earnings for 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" 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 October 25 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 +1-913-981-5597, passcode number 3682948. 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, October 25, to 11:00 a.m. EDT, November 4, at +1-888-203-1112 or +1-719-457-0820, passcode 3682948.
Forward-Looking Statements: This news release includes forward-looking statements concerning current expectations for global economic conditions; non-core or non-recurring costs, charges, income, and gains; and company and segment earnings in fourth quarter and full year 2013 and cash flow in 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 second quarter 2013 available, and the Form 10-Q to be filed for third quarter 2013 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, Tennessee, USA 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
Q3 2013 Financial Tables: http://hugin.info/150386/R/1738131/583023.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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