“It’s not so much the tariffs directly, it’s the impact on economies in the world,” Costa said. “It’s slowed down Germany and the European economy and that reduced demand affects our performance. We’re working through it (but) it’s going to be an impact until it’s over.”
The Kingsport-based specialty products company’s revenue, earnings and free cash flow were all down slightly in its second quarter report to investors.
Commenting on the outlook for full-year 2019, Costa said: “We once again delivered sequential adjusted earnings growth in the second quarter, reflecting increased new business revenue as we leverage our innovation-driven growth model and continued aggressive cost management. However, we continue to operate in a difficult global business environment due to the impact of the U.S.-China trade dispute and other factors. As a result, we no longer expect underlying macroeconomic conditions to improve in the second half of the year, except for reduced customer inventory destocking. We also expect that we will benefit in the second half from cost reduction actions and the flow through of lower-cost raw materials. Taking all of this together, we expect 2019 adjusted EPS (earnings per share) to be between $7.50 and $8.00.”
Still, Costa said Eastman continues to focus on its sustainability and circular recycling strategies, in addition to investing in its Kingsport plant site.
“It’s our biggest asset,” Costa said of the site.
Site Manager Cari Parker noted a lot of the noticeable cranes on the site are for routine maintenance.
Costa also pointed out Eastman is all in on the area’s regionalism strategy.
“I think we have a huge opportunity in the region to create a regional integrated plan that we’ve mapped out ... we have huge assets to offer,” he said. “We have a high-quality dedicated workforce (but) we have to come together as a team just like we do at Eastman every day. We act as one team and that’s what we have to do in this region. We have a huge opportunity to bring growth back to this region. It helps us attract employees and their spouses.”