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Kingsport, Tenn., USA, July 29, 2014 - (ACN Newswire) - 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.
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(In millions, except per share amounts) 2Q2014 2Q2013
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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
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* 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 Tritan(TM) copolyester was mostly offset by lower sales volume for core products such as Flexvue(R) 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 +1-913-312-0690, 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 +1-888-203-1112 or +1-719-457-0820, 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
+1-423-224-0498 / tjkilgore@eastman.com
Investors:
Greg Riddle
+1-212-835-1620 / griddle@eastman.com
Q2 2014 Financial Tables: http://hugin.info/150386/R/1840850/640560.pdf
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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
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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