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Sep 30, 2020
Eastman Chemical Q3 2020 Earnings Report
Eastman Chemical's financial performance improved due to increased demand and cost management.
Key Takeaways
Eastman Chemical Company reported a decrease in sales revenue and EBIT compared to the third quarter of 2019, but saw improved demand and adjusted earnings sequentially. The company is on track to generate greater than $1 billion of free cash flow for the fourth consecutive year.
Demand across most end markets improved, resulting in higher sales revenue and adjusted earnings sequentially.
Sales volume recovered to 5 percent below 2019 levels, with significant increases in end markets negatively impacted by COVID-19.
Cost reduction actions significantly mitigated the financial impact of COVID-19.
Generated the highest free cash flow for the first nine months of a year in company history.
Revenue by Segment
Forward Guidance
Eastman Chemical expects fourth-quarter 2020 adjusted EPS to be similar to fourth-quarter 2019 adjusted EPS of $1.42 and remains on track to generate greater than $1 billion of free cash flow for the year.
Positive Outlook
- Demand improved throughout the third quarter and into October.
- Innovation-driven growth model is enabling better performance than recovering end markets.
- On track to deliver approximately $150 million of cost savings, net of inflation, for full year 2020.
- Expect approximately $40 million of cost savings in the fourth quarter.
- Remains on track to generate greater than $1 billion of free cash flow for the year.
Challenges Ahead
- Resurgence of COVID-19 is increasing uncertainty in the global economic outlook.
- Limited visibility for the back half of the fourth quarter.
- Economic conditions are uncertain.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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