Eastman Chemical (EMN) Tops Q1 EPS by 31c; Withdraws Outlook

Eastman Chemical (NYSE: EMN) reported Q1 EPS of $2.03, $0.31 better than the analyst estimate of $1.72. Revenue for the quarter came in at $2.24 billion versus the consensus estimate of $2.26 billion.

“We delivered strong year-over-year earnings growth and impressive free cash flow, demonstrating the power of our innovation and the discipline of our operational execution,” said Mark Costa, Board Chair and CEO. “However, the impact of the COVID-19 global pandemic has resulted in unprecedented challenges as we move forward. I’m proud of how we have responded by taking actions to keep our employees safe and maintain the operational integrity of our manufacturing facilities. We also moved quickly to generate strong cash flow and ensure we had significant sources of liquidity. We are well-positioned to be resilient through this difficult period and to rebound strongly when global economic growth returns.”

GUIDANCE:

Commenting on the outlook for full-year 2020, Costa said: “In this extraordinarily challenging environment, visibility is severely limited. As a result, we are focused on the things we can control. First, we are substantially increasing our cost reduction targets to be approximately $150 million of net savings, including adjusting our operations to end-market demand, significantly reducing discretionary spend, and deferring some site turnarounds. In addition, we’ve taken steps to strengthen our cash flow including reducing capital expenditures by approximately $100 million to between $325 and $375 million. We also expect working capital to be a source of more than $250 million of cash flow beyond our previous expectations. Our capital allocation will remain disciplined, including funding our attractive dividend, reducing debt by substantially more than our original target of $400 million, and limiting share repurchases to offset dilution.”

Due to the heightened level of uncertainty related to the impact of COVID-19, the company is withdrawing its 2020 full-year earnings and cash flow forecast guidance.

For earnings history and earnings-related data on Eastman Chemical (EMN) click here.

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