Eastman Announces Second-Quarter 2016 Financial Results
(Thomson Reuters ONE) -
Eastman Announces Second-Quarter 2016 Financial Results
KINGSPORT, Tenn., July 28, 2016 - Eastman Chemical Company (NYSE:EMN) today
announced reported earnings of $1.71 per diluted share for second quarter 2016
versus $1.98 per diluted share for second quarter 2015. Earnings excluding non-
core items were $1.68 per diluted share for second quarter 2016 versus $2.01 per
diluted share for second quarter 2015. For detail of the excluded non-core items
and reconciliation to reported company and segment earnings, see Tables 3A and
4.
"The progress we have made executing our strategy to become a more specialty
chemical company is enabling us to better navigate an especially challenging
global economy," said Mark Costa, Board Chair and CEO. "The actions we have
taken to focus and accelerate our innovation and market development program and
add attractive acquisitions, while also reducing costs, have mitigated the
impact of slow global growth and volatile raw material and energy costs. We
remain confident in the resiliency of our portfolio and the sustainability of
our strong cash flow going forward."
(In millions, except per share amounts)
2Q2016 2Q2015
Sales revenue
$2,297 $2,533
Operating earnings
$376 $469
Operating earnings excluding non-core items*
$376 $480
Earnings per diluted share
$1.71 $1.98
Earnings per diluted share excluding
non-core items* $1.68
$2.01
Net cash provided by operating activities
$494 $591
*For reconciliation to reported company and segment earnings, see Tables 3A and
4.
Corporate Results 2Q 2016 versus 2Q 2015
Sales revenue declined primarily due to lower selling prices particularly in
Chemical Intermediates. Operating earnings and earnings per share declined
primarily due to declines in Chemical Intermediates and Fibers.
Segment Results 2Q 2016 versus 2Q 2015
Additives & Functional Products - Sales revenue decreased due to lower selling
prices attributed to lower raw material and energy costs. Operating earnings
decreased primarily due to lower selling prices more than offsetting lower raw
material and energy costs.
Advanced Materials - Sales revenue was relatively unchanged as increased sales
volume of premium products including Saflex(®) acoustic interlayers and Eastman
Tritan(TM) copolyester was offset by lower selling prices, primarily for
copolyesters, attributed to lower raw material and energy costs. Operating
earnings were relatively unchanged.
Chemical Intermediates - Sales revenue decreased due to lower selling prices.
The lower selling prices were mostly the result of the negative impact of lower
market prices for propylene, ethylene, and methanol and continued competitive
pressure from weak demand in Asia Pacific. Operating earnings decreased
significantly due to lower selling prices more than offsetting lower raw
material and energy costs, and higher planned maintenance costs.
Fibers - Sales revenue decreased primarily due to lower sales volume,
particularly for acetate tow and acetate flake, and lower selling prices,
particularly for acetate tow. Lower acetate tow sales volume was due to
customer inventory destocking in China and lower acetate flake sales volume was
due to timing of shipments to Eastman's China acetate tow joint venture.
Operating earnings declined due to lower sales volume.
Cash Flow
Eastman generated $494 million in cash from operating activities during
second quarter 2016 primarily due to strong net earnings. In addition, the
company sold 1.5% notes due 2023 in the principal amount of ?550 million ($614
million), with net proceeds used to repay $500 million of the $1 billion 2.4%
notes due June 2017 and other borrowings. Priorities for uses of available cash
include payment of the quarterly dividend, repayment of debt, funding targeted
growth initiatives, and repurchasing shares. Total borrowings decreased $274
million, and net debt, defined as total borrowings minus cash and cash
equivalents, declined by $312 million during the second quarter. See Tables
5A, 5B, 6A, and 6B.
Outlook
Commenting on the outlook for full-year 2016, Costa said: "During the first half
of the year, we delivered strong growth of high value, innovative specialty
products and we expect that to continue. We are also benefitting from the
actions we have taken to accelerate our innovation and market development
activities and to significantly increase our cost reduction efforts. However,
the challenges we face have intensified including increasing competitive
pressures particularly from the Asia Pacific region and compressing olefin
spreads. As a result, we expect a decline in adjusted 2016 earnings per share
that approaches 10 percent below adjusted 2015 earnings per share compared with
our previous expectation of a decline of approximately 5 percent."
The full-year 2016 projected earnings exclude the non-core items in first six
months 2016 detailed in Tables 3A and 4 and will exclude any non-core, unusual,
or non-recurring items in second half 2016. Our second half 2016 financial
results forecasts do not include non-core items (such as mark-to-market pension
and other postretirement benefit gain or loss) or any unusual or non-recurring
items, and we accordingly are unable to reconcile projected full-year 2016
earnings excluding non-core and any unusual or non-recurring items to reported
GAAP earnings without unreasonable efforts.
Forward-Looking Statements
This news release includes forward-looking statements concerning current
expectations for future global economic conditions; competitive position and
acceptance of specialty products in key markets; mix of products sold; raw
material and energy prices and costs, and other costs; and revenue, earnings,
and cash flow for full year 2016. 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 2016 available, and the Form 10-Q to be filed
for second quarter 2016 and to be available, on the Eastman web site at
www.eastman.com in the Investors, SEC filings section.
Conference call and webcast information
Eastman will host a conference call with industry analysts on July 29, 2016 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 913-312-6697, passcode number
7456708. 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 8, at 888-203-1112 or 719-457-0820, passcode 7456708.
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 2015 revenues of approximately
$9.6 billion. The company is headquartered in Kingsport, Tennessee, USA and
employs approximately 15,000 people around the world. For more information,
visit www.eastman.com.
# # #
Contacts:
Media: Tracy Kilgore
423-224-0498 / tracy(at)eastman.com
Investors: Greg Riddle
212-835-1620 / griddle(at)eastman.com
ex99_01 2016.06.30 CC Tables FINAL:
http://hugin.info/150386/R/2031791/756176.pdf
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Source: Eastman Chemical Company via GlobeNewswire
[HUG#2031791]
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Datum: 28.07.2016 - 22:46 Uhr
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News-ID 486217
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