KINGSPORT — Eastman continued feeling the effects of the U.S.-China trade dispute in the company’s announced second quarter revenues and earnings report released on Thursday.

The Kingsport-based company isn’t expecting things to get better this year.

“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,” said Eastman Board Chair and CEO Mark Costa. “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."

Costa pointed out slower global economic growth led to reduced demand and an unfavorable product mix for its specialty products, particularly in China and Europe.

“I am particularly proud of our employees around the world who are driving growth in new business revenue leveraging our innovation-driven growth model and aggressively managing costs in this challenging economic environment,” Costa noted.

Revenue for the quarter was $2.3 billion, down from $2.6 billion in second quarter 2018. Sales decreased in all four of Eastman’s major operating segments. Reported and adjusted EBIT (earnings before interest and taxes) decreased primarily due to lower sales volume, less favorable product mix and an unfavorable shift in foreign currency exchange rates, partially offset by continued cost management. Lower raw material costs offset lower selling prices.

The company expects to approach $1.1 billion of free cash flow (cash from operating activities less net capital expenditures) in 2019. Priorities for uses of available cash include payment of the quarterly dividend, repayment of debt, funding targeted growth initiatives and repurchasing shares.

In second quarter 2019, the company generated $422 million cash from operating activities and free cash flow was $330 million. In the same period, the company returned $211 million to stockholders, with $86 million of dividends and $125 million of share repurchases.

Eastman is a global specialty chemical company that produces a broad range of advanced materials, chemicals and fibers for everyday purposes.

Eastman’s stock closed Thursday at $80.63 per share, down 1.36 percent from Wednesday.