Eastman Chemical : 1st Quarter 2025 Sales and Earnings Results Conference Call Press Release

Published: 2025-04-25 10:04:33 ET EMN

Eastman Announces First-Quarter 2025 Financial Results

KINGSPORT, Tenn., April 24, 2025 - Eastman Chemical Company (NYSE:EMN) announced its first-quarter 2025 financial results.

• Strong first-quarter financial results with adjusted EPS in line with our guidance in January and up 19% year over year

• Delivered year-over-year adjusted EBIT margin improvement of 170 basis points underpinned by continued innovation, commercial excellence, and operating leverage in a tough environment

• Recorded best-ever uptime and production quantities at the Kingsport methanolysis facility

• Increased focus on cost discipline, prioritizing cash generation as we navigate the economic impacts of tariffs

(In millions, except per share amounts; unaudited)

1Q25

1Q24

Sales revenue

$2,290

$2,310

Earnings before interest and taxes ("EBIT")

302

263

Adjusted EBIT*

311

274

Earnings per diluted share

1.57

1.39

Adjusted earnings per diluted share*

1.91

1.61

Net cash used in operating activities

(167)

(16)

*For non-core items excluded from adjusted earnings and for adjusted provision for income taxes, segment adjusted EBIT margins, and net debt, reconciliations to reported company and segment earnings and total borrowings for all periods presented in this release, see Tables 3A, 3B, 4A, and 6.

"Leveraging our innovation-driven growth model, we delivered a strong quarter in line with expectations," said Mark Costa, Board Chair and CEO. "Against the backdrop of a highly volatile and uncertain macroeconomic environment, our teams drove sequential volume/mix improvements across most segments, partially offset by expected destocking in Fibers. We focused on innovation and commercial excellence in defending the value of our products as well as controlling costs. We recorded our best-ever quarter of uptime and production quantities at the Kingsport methanolysis facility and remain on track for the production targets and cost benefits detailed earlier this year. Although our solid first-quarter results positioned us to be in line with our original guidance, late in the quarter, the reality of a global trade dispute increased significantly. We began taking action to optimally navigate the next several quarters. Our first-quarter results, coupled with our bias for action, give me great confidence in our ability to deliver strong cash flow and resilient earnings going forward."

Corporate Results 1Q 2025 versus 1Q 2024

Sales revenue decreased 1 percent as 1 percent lower sales volume/mix and an unfavorable foreign currency exchange impact were partially offset by 1 percent higher selling prices.

Sales volume/mix was primarily driven by customer inventory destocking in acetate tow products, mostly offset by higher sales volume/mix in Additives & Functional Products and Chemical Intermediates. Higher selling prices were due to cost-pass-through contracts.

EBIT increased primarily due to the Kingsport methanolysis facility running well and improved price-cost across the specialties and Chemical Intermediates. These factors were partially offset by lower sales volume/mix for Fibers and an unfavorable foreign currency exchange impact. Adjusted EBIT margins increased 170 basis points.

Segment Results 1Q 2025 versus 1Q 2024

Advanced Materials - Sales revenue decreased 4 percent due to 2 percent lower selling prices, 1 percent lower sales volume/mix, and an unfavorable foreign currency exchange impact.

Lower selling prices were reflected across the segment. Lower sales volume/mix was due to weakness in the automotive and building and construction end markets. The lower sales volume/mix was partially offset by growth in specialty plastics.

EBIT increased primarily due to improved product mix and continued cost discipline, partially offset by an unfavorable foreign currency exchange impact.

Additives & Functional Products - Sales revenue increased by 4 percent due to 3 percent higher selling prices and 2 percent higher sales volume/mix, partially offset by an unfavorable foreign currency exchange impact.

Higher selling prices were driven by cost-pass-through contracts. Higher sales volume/mix was primarily due to coatings additives and specialty fluids.

EBIT increased due to favorable price-cost, higher sales volume/mix, and improved asset utilization.

Fibers - Sales revenue decreased by 13 percent due to 12 percent lower sales volume/mix and 1 percent lower selling prices.

Lower sales volume/mix was driven by continued customer inventory destocking in acetate tow and the impact of a discontinued product.

EBIT declined primarily due to lower sales volume/mix.

Chemical Intermediates - Sales revenue increased by 4 percent due to 3 percent higher selling prices and 2 percent higher sales volume/mix, partially offset by an unfavorable foreign currency exchange impact.

Higher selling prices and higher sales volume/mix were driven by more favorable market conditions for some olefin-based products compared to the prior year period.

EBIT increased due to higher olefin and derivative spreads, partially offset by unfavorable product mix.

Cash Flow

In first-quarter 2025, cash used in operating activities was $167 million versus $16 million in first quarter 2024. The primary driver was an increased use of cash for working capital due to inventory that was built for a higher-than-usual planned shutdown season in second quarter 2025. The company returned $96 million to stockholders through dividends. See Table 5. Priorities for uses of available cash for 2025 include capital expenditures, payment of the quarterly dividend, and share repurchases.

2025 Outlook

Commenting on the outlook for full-year 2025, Costa said: "We are proud to have delivered a solid first quarter in a challenging, uncertain environment. Since the end of the first quarter, the macroeconomic uncertainty that defined the last several years has only increased and future end-market demand is unclear given the magnitude and scope of tariffs. In this context, we are focused on controllable actions including an increased priority on cash generation in preparation for a potential recession. We are also increasing our cost reduction target to approximately $75 million net of inflation and reducing capital expenditures to around $550 million. With an innovative portfolio of specialty products, a diverse set of end markets, and a solid balance sheet, we are well positioned to navigate issues associated with escalating tariffs impacting global trade. In this context, we expect to generate strong operating cash flow of approximately $1.2 billion for full-year 2025 consistent with our track record of delivering cash in varied macro environments. With a broad range of outcomes for the global economy and limited visibility, the company is moving to quarterly adjusted earnings per share guidance. In the second quarter, order patterns for April remain stable with March, and we expect a modest sequential volume increase across our markets, but due to trade uncertainty, not as much as typical. Second quarter also includes headwinds associated with tariffs between the U.S. and China and higher planned maintenance costs. Taking these factors together, second-quarter adjusted EPS is expected to be in the range of $1.70 to $1.90."

The second-quarter 2025 projected adjusted diluted EPS excludes any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS without unreasonable efforts.

Forward-Looking Statements

The information in this release and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, statements of management's plans, strategies and objectives for future operations, and statements regarding future economic, industry or market conditions or performance. Such projections

and estimates are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and as updated in the company's filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC's website atwww.sec.gov and the company's website atwww.eastman.com.

Conference Call and Webcast Information

Eastman will host a conference call with industry analysts on April 25, 2025, at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides and prepared remarks, go toinvestors.eastman.com,Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available atinvestors.eastman.com at approximately 4:15 p.m. ET on April 24, 2025. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 597256. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available atinvestors.eastman.com,Events & Presentations. A telephone replay will be available continuously beginning at approximately 1:00 p.m. Eastern Time, April 25, 2025, through 11:59 p.m. Eastern Time, May 5, 2025, Toll Free at +1 (866) 813-9403, passcode 408681.

Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company's innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive company, Eastman employs approximately 14,000 people around the world and serves customers in more than 100 countries. The company had 2024 revenue of approximately $9.4 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visitwww.eastman.com.

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Contacts:

Media: Tracy Kilgore Addington 423-224-0498 /[email protected]

Investors: Greg Riddle 212-835-1620 /[email protected]

FINANCIAL INFORMATION April 24, 2025

For Eastman Chemical Company First Quarter 2025 Financial Results Release

Table of Contents

Item

Page

Table 1

Statements of Earnings

Table 2A

Segment Sales Information

Table 2B

Sales Revenue Change

Table 2C

Sales by Customer Location

1233

Table 3A

Segment, Other, and Company Non-GAAP Earnings (Loss) Before Interest and TaxesReconciliations

Table 3B Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins

Table 4A Non-GAAP Earnings Before Interest and Taxes, Net Earnings, and Earnings Per Share Reconciliations

Table 4B Adjusted Effective Tax Rate Calculation

Table 5

Statements of Cash Flows

Table 6

Total Borrowings to Net Debt Reconciliations

7 8 9 9

Table 1 - Statements of Earnings

(Dollars in millions, except per share amounts; unaudited)

Sales

2,290 $ 2,310

Cost of sales Gross profit

1,723 1,778

567 532

Selling, general and administrative expenses Research and development expenses

Asset impairments, restructuring, and other charges, net Other components of post-employment (benefit) cost, net Other (income) charges, net

182 191

67 59

9 11

(1) (5)

8 13

302 263

Earnings before interest and taxes Net interest expense

49 49

253 214

Earnings before income taxes Provision for income taxes

70 49

Net earnings

183 165

Less: Net earnings attributable to noncontrolling interest Net earnings attributable to Eastman

$ $ $

Basic earnings per share attributable to Eastman Diluted earnings per share attributable to Eastman

182 1.58 1.57

$ 165

$ 1.40

$ 1.39

Shares (in millions) outstanding at end of period

115.5 117.6

Shares (in millions) used for earnings per share calculation

Basic

115.2 117.4

Diluted

116.5 118.2

Table 2A - Segment Sales Information

(Dollars in millions, unaudited)

Sales by Segment

719 $ 748

Additives & Functional Products Chemical Intermediates

733 704

545 523

Fibers

288 331

Total Sales by Segment

2,285 2,306

Other

Total Eastman Chemical Company

2,290

(Dollars in millions, unaudited)

Sales by Segment

4 2,310

Fourth Quarter

2024

Advanced Materials

$ 720

Additives & Functional Products 696

Chemical Intermediates 503

Fibers 321

Total Sales by Segment 2,240

Other

Total Eastman Chemical Company

5 2,245

Table 2B - Sales Revenue Change

First Quarter 2025 Compared to First Quarter 2024

Change in Sales Revenue Due To

Advanced Materials

(Unaudited)

Additives & Functional Products Chemical Intermediates

Total Eastman Chemical Company

Fibers

Volume /

Exchange

Revenue

Product Mix

Rate

% Change

Effect

Price Effect

Effect

(4) %

(1) %

(2) %

(1) %

4 %

2 %

3 %

(1) %

4 %

2 %

3 %

(1) %

(13) %

(12) %

(1) %

- %

(1) %

1 %

(1) %

First Quarter 2025 Compared to Fourth Quarter 2024

Change in Sales Revenue Due To

Advanced Materials

(Unaudited)

Additives & Functional Products Chemical Intermediates

Total Eastman Chemical Company

Fibers

(Dollars in millions, unaudited)

Sales by Customer Location

Revenue

% Change

- %

1 %

5 %

4 %

8 %

9 %

(10) %

2 %

Volume /

Exchange

Product Mix

Rate

Effect

Price Effect

Effect

- %

(1) %

2 %

(1) %

- %

(1) %

- %

1 %

(1) %

Table 2C - Sales by Customer Location

First Quarter

2025

2024

1,020 $ 969

539 564

United States and Canada Europe, Middle East, and Africa Asia Pacific

Latin America

610 659

121 118

Total Eastman Chemical Company

2,290

$ 2,310

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (1)

First Quarter

(Dollars in millions, unaudited)

2025

2024

Earnings before interest and taxes Additives & Functional Products

116

$ 104

Earnings before interest and taxes

137 109

Asset impairments, restructuring, and other charges, net (2)

Excluding non-core item

141 109

Chemical Intermediates

Earnings before interest and taxes Fibers

19 16

Earnings before interest and taxes Other

88 117

Loss before interest and taxes

(58) (83)

Asset impairments, restructuring, and other charges net(3)

Excluding non-core items

5 11 (53) (72) Total Eastman Chemical Company

Earnings before interest and taxes

Asset impairments, restructuring, and other charges, net

302 263 9 11

Total earnings before interest and taxes excluding non-core items

311

$ 274

Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items

Earnings before interest and taxes

302

$ 263

Asset impairments, restructuring, and other charges, net

9 11

Total earnings before interest and taxes excluding non-core items

311

$ 274

(1)

See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of theQuarterly Report on Form 10-Q

for first quarter 2024 for description of first quarter 2024 non-core items.

(2)

First quarter 2025 includes severance charges of $1 million and restructuring charges of $3 million related to the closure of a heat-

transfer fluids production line at a North America specialty fluids and energy facility in the Additives & Functional Products segment.

(3)

First quarter 2025 includes profitability improvement initiatives of $5 million which are reported in "Other".

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued) (1)

Fourth

Quarter

(Dollars in millions, unaudited)

2024

Advanced Materials

Earnings before interest and taxes

107

Additives & Functional Products

Earnings before interest and taxes

128

Chemical Intermediates

Earnings before interest and taxes

Fibers

Earnings before interest and taxes

103

Other

Loss before interest and taxes

(9)

Asset impairments, restructuring, and other charges, net

Mark-to-market pension and other postretirement benefit plans (gain) loss, net

(54)

Excluding non-core items

(53)

Total Eastman Chemical Company

Earnings before interest and taxes

349

Asset impairments, restructuring, and other charges, net

Mark-to-market pension and other postretirement benefit plans (gain) loss, net

(54)

Total earnings before interest and taxes excluding non-core items

305

Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items

Earnings before interest and taxes

349

Asset impairments, restructuring, and other charges, net

Other components of post-employment (benefit) cost, net

(54)

Total earnings before interest and taxes excluding non-core items

305

(1)

For the description of fourth quarter 2024 non-core items, see Table 3A of theQuarterly Report on Form 8-K furnished for fourth quarter 2024.

Disclaimer

Eastman Chemical Company published this content on April 25, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 25, 2025 at 13:56 UTC.