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Sep 30
Eastman Chemical Q3 2025 Earnings Report
Eastman Chemical's Q3 2025 earnings reflected a focus on cash generation and inventory reduction amidst a challenging macroeconomic environment.
Key Takeaways
Eastman Chemical reported a decrease in sales revenue and EBIT in the third quarter of 2025, primarily due to lower sales volume/mix across all segments and reduced asset utilization. Despite these headwinds, the company delivered strong operating cash flow and made significant progress on inventory reduction, while maintaining stable prices in specialty businesses.
Sales revenue decreased by 11% to $2,202 million, driven by lower sales volume/mix and selling prices.
Adjusted EBIT was $210 million, down from $366 million in the prior-year quarter.
Net cash provided by operating activities was strong at $402 million, consistent with the prior year.
Adjusted earnings per diluted share were $1.14, a decrease from $2.26 in Q3 2024.
Eastman Chemical
Eastman Chemical
Forward Guidance
Eastman expects a greater than normal seasonal decline in volume in Q4 2025 due to challenging macroeconomic conditions, particularly in consumer discretionary markets. The company remains focused on cash flow, cost management, and expects price-cost stability. Full-year 2025 adjusted EPS is projected between $5.40 and $5.65, with operating cash flow approaching $1 billion.
Positive Outlook
- Expect price-cost stability due to commercial excellence in defending prices and market share.
- On track to reduce costs by more than $75 million, net of inflation, in 2025.
- Plan to build on cost reduction progress by reducing structural costs by approximately $100 million, net of inflation, in 2026.
- Expect lower planned shutdown costs and a modest asset utilization tailwind after inventory reduction actions.
- Projected full-year 2025 operating cash flow to approach $1 billion.
Challenges Ahead
- Expect a greater than normal seasonal decline in volume in Q4 2025.
- Macroeconomic environment continues to be challenging, especially in consumer discretionary markets.
- Signs of increasing consumer caution, including value-oriented trade-down behavior.
- Customers are continuing to unwind inventory purchased and prepositioned in the first half of the year.
- Full-year 2025 adjusted EPS projected between $5.40 and $5.65, indicating continued pressure.