Eastman Earnings Climb as Chemical Intermediates Rebound
Second-quarter sales rose 15% sequentially to $2.513 billion as volume and pricing improved.
Eastman Chemical Company (EMN), the specialty-materials maker, posted a broad second-quarter recovery as Chemical Intermediates returned to profitability and companywide margins widened.
The quarter marked a turn in Eastman’s trajectory. Sales rose 10% from a year earlier, reversing declines of 5% in the first quarter and 12% in the fourth quarter of 2024. Volume and mix increased 5%, prices rose 4% and currency added 1%.
Adjusted earnings climbed 23% to $1.97 a share, while adjusted EBIT rose 16% to $320 million. GAAP diluted earnings increased 33% to $1.59 a share. The adjusted EBIT margin expanded to 12.7% from 9.2% in the first quarter and 12.0% a year earlier.
Chemical Intermediates supplied the strongest lift. Segment sales jumped 39% from a year earlier and 30% sequentially to $643 million, supported by higher volumes and prices. Adjusted EBIT swung to $58 million from an $18 million first-quarter loss and a $30 million loss a year earlier.
Advanced Materials sales increased 14% sequentially to $817 million as volume and mix rose 11%, helping its adjusted EBIT margin recover to 13.3% from 9.7%. Additives & Functional Products recorded a 9% sequential sales increase, though its margin narrowed to 18.7%. Fibers remained under pressure, with sales down 11% from a year earlier and adjusted EBIT falling to $36 million from $81 million.
Eastman expects third-quarter adjusted earnings near the second quarter’s $1.97 a share. Higher earnings from Advanced Materials and Fibers are expected to offset modest declines in Additives & Functional Products and Chemical Intermediates as agricultural seasonality and Middle East-related supply disruptions ease.
The company lowered its 2025 operating-cash-flow outlook to approximately $900 million from a previous expectation of approaching 2024’s $970 million, citing inflation-related pressure on accounts receivable. Eastman maintained its $125 million to $150 million net cost-savings target, approximately $400 million of capital spending and its forecast for significantly higher full-year earnings.
Revenue from its circular platform doubled during the first half as the Kingsport methanolysis facility ramped commercially. The company had targeted about $30 million of incremental 2025 earnings from the facility, extending the contribution from a project central to its shift toward circular materials.