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Eastman's June shutdown negatively impacts earnings by $10 M

July 29th, 2014 7:24 am by Hank Hayes

Eastman's June shutdown negatively impacts earnings by $10 M

Times-News file photo.

KINGSPORT — Eastman Chemical Co. announced on Monday slightly higher earnings and revenues during this year's second quarter, despite an unplanned operations shutdown.

Eastman reported the June 4 shutdown, caused by a power disruption at the Kingsport plant, negatively impacted second quarter operating earnings by about $10 million.

Still, earnings from continuing operations, excluding non-core or non-recurring items, were $1.92 per diluted share for the second quarter versus $1.80 per diluted share in last year's second quarter.

Sales revenue was $2.5 billion, a slight increase compared with 2013's second quarter. Operating earnings for the second quarter were $436 million, compared with $428 million in last year's second quarter.

"We delivered solid results across our portfolio in the second quarter despite a number of challenges," Mark Costa, Eastman's chairman and CEO, said in a prepared release. "We continue to focus on growth through Eastman-specific actions, including serving growing markets with capacity additions, improving our mix with higher-value products, and disciplined capital allocation. As a result, Eastman remains well positioned for a fifth consecutive year of strong earnings growth."

Costa added Eastman continues to expect 2014 earnings per share to be between $6.70 and $7.

Sales revenue moved higher during the second quarter in Eastman's Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials and Fibers segments, but declined in the Specialty Fluids & Intermediates segment.

The decline in the Specialty Fluids & Intermediates was partly attributed to a first-quarter weather-related outage at the Longview, Texas, site and the unplanned June shutdown at the Kingsport location .

But Eastman also reported generating $419 million in cash from operating activities during the second quarter, primarily due to strong net earnings.

During the quarter, the company completed the acquisition of the aviation turbine oil business from BP plc, which is now a part of the Specialty Fluids & Intermediates segment, and repurchased shares for a total of $100 million.

In addition, the company issued $500 million of 30-year public debt at an interest rate of 4.65 percent, with proceeds to be used for general corporate purposes.

"We delivered solid earnings in the first half of the year despite a number of headwinds. Looking forward, we remain confident in our ability to generate strong year over year earnings growth," Costa said of the 2014 full year outlook.

Eastman's stock closed Monday at $88.67 per share, down .05 percent from Friday.

Eastman, a global specialty chemical company, recorded 2013 revenues of approximately $9.4 billion.

The company is headquartered in Kingsport and employs about 14,000 people around the world.

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