Eastman Restores Earnings After Sequential Sales Drop

The Tip Desk · October 30, 2026 · 3 min read

Third-quarter sales were $2.39 billion as prices rose 7% and volume/mix rose 1%, lifting diluted EPS to $2.19 from $0.60 a year earlier.

Eastman Chemical Company (EMN) reported third-quarter 2026 sales of $2.39 billion, up 8% from a year earlier, as selling prices rose 7% and sales volume/mix rose 1%. Diluted earnings were $2.19 a share, versus $0.60 a year earlier. Adjusted diluted earnings were $1.84 a share, versus $1.14. EBIT was $305 million, versus $188 million. Adjusted EBIT was $305 million, versus $210 million, and the adjusted EBIT margin was 12.8%, versus 9.5%.

The specialty materials company said higher selling prices across the company were driven primarily by higher raw material and distribution costs and by tight market conditions in Chemical Intermediates tied to the Middle East conflict. EBIT increased primarily due to improved asset utilization after inventory-reduction actions in the third quarter of 2025, including lower planned maintenance expense and favorable price-cost, partially offset by higher variable compensation. Board Chair and CEO Mark Costa said the company remained on track to implement approximately $500 million of selling price increases in 2026 compared with expectations from before the conflict began.

Sequentially, sales fell 5% from $2.51 billion in the second quarter, as volume/mix declined 7% and selling prices rose 2%. The company said sequential sales volume/mix decreased due to seasonal declines across key end markets and softening underlying demand in automotive and consumer durables. Advanced Materials sales were $762 million, up 5% from a year earlier on 4% higher selling prices and 1% favorable foreign exchange, with volume/mix unchanged. Adjusted EBIT in the segment was $103 million, versus $53 million, and the adjusted EBIT margin was 13.5%, versus 7.3%. Additives & Functional Products sales were $784 million, up 9% from a year earlier on 10% higher selling prices, partially offset by 1% lower volume/mix. Adjusted EBIT was $154 million, versus $128 million, and the adjusted EBIT margin was 19.6%, versus 17.9%.

Chemical Intermediates sales were $580 million, up 16% from a year earlier on 12% higher selling prices and 4% higher volume/mix. The company said higher prices and volumes, particularly for olefin and derivative products, were driven by increased volume availability and tight market conditions due to the ongoing conflict. EBIT was $35 million, versus $1 million, and the adjusted EBIT margin was 6.0%, versus 0.2%. Fibers sales were $255 million, essentially unchanged from a year earlier, as 4% higher volume/mix was offset by 4% lower selling prices. EBIT was $52 million, versus $67 million, and the adjusted EBIT margin was 20.4%, versus 26.4%. The company attributed the EBIT decrease to lower acetate tow contract pricing and increased raw material and distribution costs.

Cash provided by operating activities was $290 million, versus $402 million a year earlier. The company returned $96 million to stockholders through dividends. It announced reinstatement of a $375 million U.S. Department of Energy award supporting scale-up of the circular platform and said it remains on track to deliver $125 million to $150 million of cost savings, net of inflation, in 2026.

Costa said the company expects sequential demand declines with normal seasonality and some additional customer caution, somewhat offset by innovation-driven growth, and an increase in acetate tow sales volume in Fibers as customers meet annual contract commitments. Given the acceleration of raw material and distribution costs through the quarter, the company said it is taking additional price actions across the company and expects higher planned shutdown costs in the fourth quarter, partially offset by a continuation of cost actions. It projects full-year 2026 adjusted diluted earnings of $6.00 to $6.20 a share and operating cash flow of approximately $850 million.