KINGSPORT — Eastman Chemical Co. announced Thursday $9.4 billion in sales revenue for 2013 — a 15 percent increase over 2012 — plus $1.9 billion in operating earnings for full year 2013 compared to $800 million in 2012.
“Our outstanding results in 2013 represent the fourth consecutive year of strong earnings growth for Eastman,” incoming Eastman Chief Executive Officer Mark Costa said in a prepared release. “This high level of performance continues to be driven by our market-leading businesses, balanced deployment of our solid cash flow, and the significant actions we have taken to improve our portfolio.”
For last year’s fourth quarter, Eastman said that excluding non-core or non-recurring items, earnings were $1.35 per diluted share versus $1.19 per diluted share for the fourth quarter of 2012.
Reported earnings were $2.22 per diluted share in fourth quarter 2013 and a loss of $0.35 per diluted share in fourth quarter 2012.
Eastman’s sales revenue for fourth quarter 2013 was $2.3 billion, a 4 percent increase compared with fourth quarter 2012 due primarily to higher sales volume in the Additives & Functional Products, Advanced Materials, and Fibers segments.
Operating earnings in fourth quarter 2013 were $562 million compared to a loss of $44 million in fourth quarter 2012. Excluding non-core or non-recurring items, fourth-quarter 2013 operating earnings were $329 million compared to $326 million in fourth quarter 2012.
Pro forma combined operating earnings, excluding non-core or non-recurring items, were $1.6 billion for full year 2013 compared with $1.5 billion for full year 2012. Pro forma combined operating earnings increased primarily due to higher sales volume and lower raw material and energy costs, according to Eastman.
Excluding the tax impact of non-core or non-recurring items, the fourth-quarter 2013 effective tax rate for Eastman was 26 percent compared to 34 percent for fourth quarter 2012. Eastman noted the fourth-quarter 2013 effective tax rate reflects the positive impacts of integrating the Eastman and acquired Solutia tax structures and a favorable foreign tax audit settlement.
Eastman also said it generated $1.3 billion in cash from operating activities in 2013. The company generated free cash flow, defined as cash from operating activities minus capital expenditures and dividends, of $674 million in 2013. In addition, during 2013 the company repaid the $950 million balance of the Solutia acquisition term loan using a combination of available cash and lower-cost borrowings.
Concerning the outlook for 2014, Costa said: “We enter 2014 well positioned to benefit from specific actions we are taking across the company to increase earnings as well as balanced deployment of continued strong cash generation. We also face challenges, including increasing raw material and energy costs, particularly for propane, and continued economic uncertainty. Given the strength of our differentiated portfolio of businesses, we currently 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.
Eastman’s stock closed at $75.97 per share, up nearly two percent from Wednesday.
For more go to www.eastman.com.