KINGSPORT — Eastman Chemical Co. on Thursday posted higher sales and earnings for the third quarter, thanks to a diverse product portfolio and measures implemented in the last five years to improve profitability.
The Kingsport-based company posted net earnings of $100 million or $1.33 per diluted share in the third quarter this year vs. $20 million or 24 cents per share in the same period of 2007.
Excluding one-time items, earnings from continuing operations were $1.35 per share in the quarter this year vs. $1.27 per share in the same period last year.
Meanwhile, sales revenue increased 8 percent to $1.8 billion for the quarter.
“We delivered solid third quarter earnings despite significant raw material and energy cost volatility, uncertain prospects for the global economy, and difficulty in the financial markets,” said Eastman Chairman and Chief Executive Officer Brian Ferguson. “We continue to benefit from the diversity of our portfolio of businesses and the actions we have taken over the last five years to improve our profitability and strengthen our financial position.”
Eastman’s sales and earnings are up, but its stock — along with most companies traded on the major indices — is in the tank. Traded under the symbol “EMN” on the New York Stock Exchange, the stock closed Thursday at $36.83, down $1.40 for the day. Last spring — before the financial meltdown and ensuing stock market plunge — Eastman’s stock traded as high as $78.29.
Earlier this month, Eastman announced its earnings would beat the high-end of Wall Street expectations, which were $1.30 per share at the time.
This year’s quarterly results included $3 million in accelerated depreciation costs and $2 million in asset impairments and restructuring charges.
Eastman’s 2007 third quarter results included a hit of $120 million in asset impairments and restructuring charges, primarily due to the sale of the company’s PET polymers plants in Mexico and Argentina. The third quarter 2007 results were also impacted by $9 million from continuing restructuring moves at the company’s Longview, Texas, and Columbia, S.C., operations.
Eastman reports the financial results in its individual business segments. In the coatings, adhesives, specialty polymers and inks segment, sales revenues increased 11 percent, while operating earnings were $55 million in the third quarter 2008 vs. $58 million in the same period last year.
In the fibers segment, sales revenue rose 4 percent and operating earnings fell slightly to $65 million vs. $66 million in the 2007 third quarter.
In the performance chemicals and intermediates segment, sales revenue rose 17 percent while operating earnings increased to $65 million vs. $51 million in the third quarter last year.
In the performance polymers segment, sales revenue fell 14 percent primarily due to the divestiture of the PET polymers operations in Mexico and Argentina late last year. Excluding accelerated depreciation costs and asset impairments and restructuring charges for both periods, results for the company’s domestic PET sites improved to $1 million in operating earnings in the third quarter this year vs. a loss of $3 million in the same period of 2007.
And in the specialty plastics segment, sales revenue rose 17 percent while operating earnings fell to $6 million in the quarter vs. $13 million in the 2007 period.
As for the rest of the year, Ferguson said the company continues to benefit from its “global geographic profile, diverse product portfolio and solid financial position.”
“We also continue to confront economic weakness in North America and Europe, slowing demand growth in Asia, and volatile raw material and energy costs,” he said.
Foreseeing weak economic growth through year’s end, Ferguson said he expects fourth quarter 2008 earnings per share from continuing operations to be near the low end of analyst expectations, which is 90 cents per share.
Eastman manufactures and markets chemicals, plastics and fibers and posted sales of $6.8 billion in 2007. The company employs 10,500 people worldwide, including 7,000 in Kingsport.