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Eastman Chemical Saw a Marginal Fall in Q3 2018

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Aug. 18 2020, Updated 5:32 a.m. ET

Eastman Chemical announces third-quarter earnings results

On October 25, Eastman Chemical (EMN) announced its third-quarter earnings results. EMN reported adjusted EPS of $2.34, a rise of 6.8% over the previous year.

In the third quarter of 2017, EMN reported adjusted EPS of $2.19, beating analysts’ estimate of $2.29.

EMN reported revenue of $2.54 billion, an increase of 3.3% over the previous year. EMN also beat analysts’ revenue expectation of $2.53 billion. EMN said that for 2018, it expects its adjusted EPS to rise 10%–14% over the previous year.

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Mark Costa, EMN’s chair and CEO, said, “Our third-quarter results reflect the contribution of our innovation-driven growth model, continued cost management, and disciplined capital allocation. We delivered six percent top-line growth in our specialties, Advanced Materials and Additives & Functional Products, and sequentially stable earnings in Fibres. The operating results and a lower effective tax rate resulted in solid year-over-year EPS growth.”

Stock performance

Eastman Chemical stock fell 3.2% and closed at $78.15 in the week that ended on October 26. It outperformed the First Trust Materials AlphaDEX ETF (FXZ), which fell 5.3%. The fund invests 3.2% of its portfolio in Eastman Chemical. It also provides exposure to LyondellBasell (LYB), Westlake Chemical (WLK), and Huntsman (HUN) with weights of 3.4%, 3.3%, and 2.4%, respectively.

The fall in EMN’s stock price resulted in its trading 19.5% below its 100-day moving average price of $97.03, indicating the prevailing weakness in its stock. On a year-to-date basis, the stock is down 15.6%.

Analysts expect Eastman Chemical’s target price to be $103.50, which implies a return potential of 32.4% from its closing price on October 26. Eastman Chemical’s 14-day relative strength index of 27 indicates that the stock has moved into an oversold position.

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