MOSCOW (MRC) -- Eastman Chemical saw its profits jump in the first quarter of 2016, helped by its cost-management actions and strong growth of its specialty products. But its sales declined in the quarter, hurt by lower selling prices and currency headwinds, sai the company on its stite.
The chemical maker recorded profit (as reported) of USD251 million or USD1.69 per share, a roughly 47% year over year surge from USD171 million or USD1.14 per share recorded a year ago.
Barring one-time items, earnings were USD1.71 per share for the quarter, down from USD1.84 per share in the year ago-quarter. However, it topped the Zacks Consensus Estimate of USD1.53.
Revenues fell around 8% year over year to USD2,236 million in the quarter, missing the Zacks Consensus Estimate of USD2,344 million. The decline was mainly due to lower sales in the Chemical Intermediates unit. Unfavorable currency translation and lower pricing weighed on the top line.
Operating earnings (excluding one-time items) were USD406 million in the quarter, down around 7% from USD435 million a year ago, as gains in Advanced Materials was more than offset by a decline in Chemical Intermediates.
Revenues from the Additives and Functional Products division went down 8% year over year to USD737 million in the reported quarter. The decline was mainly due to lower selling prices as a result of reduced raw material and energy costs and competitive pressure for certain products, especially in Asia Pacific.
Revenues from the Advanced Materials unit rose 5% to USD589 million due to higher sales volume of premium products, partly offset by reduced selling prices (mainly for copolyesters) due to lower raw material and energy costs.
Chemical Intermediates sales tumbled 21% to USD620 million, hurt by lower selling prices resulting from reduced raw material and energy costs and sustained competitive pressure from weak demand in Asia Pacific.
Fibers segment sales edged down 1% to USD280 million due to a decline in acetyl chemical sales volume and lower acetate tow selling prices.
Eastman Chemical ended the quarter with cash and cash equivalents of USD202 million, up roughly 3% year over year. Total debt fell roughly 3% year over year to USD7,078 million. Eastman Chemical generated operating cash flows of USD47 million in the reported quarter, down 48% year over year.
As MRC informed earlier, Eastman Chemical is seeking options to off-load its excess ethylene excess ethylene and other olefin intermediates in the US. Eastman has four crackers in Longview, Texas, which are able to produce ethylene and propylene. The company is seeking to monetize its excess ethylene as well as olefin intermediates.
Eastman (headquartered in Kingsport, Tennessee, USA) is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction, and consumables. Eastman is a global specialty chemicals company with 15,000 employees worldwide.
MRC