Executive Summary

Q1 2025 delivered resilient results amid rising trade/tariff uncertainty: adjusted EPS of $1.91 (+19% y/y) on sales of $2.290B (–1% y/y); Adjusted EBIT rose to $311M with a 170 bps y/y margin uplift to 13.6% as price-cost held and Kingsport methanolysis ran at best-ever uptime .
Versus S&P Global consensus, EMN posted a slight EPS beat ($1.91 vs $1.89*) and a modest revenue miss ($2.290B vs $2.330B*), reflecting strong execution but softer top line in Fibers and EMEA weakness .
Guidance pivot: management withdrew full‑year EPS guidance (was $8.00–$8.75 set Jan 30) and moved to quarterly EPS, guiding Q2 adjusted EPS of $1.70–$1.90; 2025 OCF guided to ~$1.2B (from ~$1.3B), capex cut to ~$550M, and cost reduction target increased to ~$75M net of inflation .
Near-term stock reaction catalysts: tariff path and China/U.S. trade visibility, Renew revenue cadence (revised to $50–$75M due to tariffs), sequential demand into June, and execution on capex/cost-down plan; mgmt quantified a ~~$30M Q2 tariff-related volume headwind and flagged unusual Q2 turnaround costs (~~$20M) .

What Went Well and What Went Wrong

What Went Well
- “Best-ever quarter of uptime and production quantities at the Kingsport methanolysis facility,” supporting a 170 bps y/y adjusted EBIT margin improvement to 13.6% and y/y EPS growth in line with expectations .
- Additives & Functional Products (AFP) and Chemical Intermediates (CI) posted revenue growth y/y on higher price and volume/mix; AM EBIT up on mix and cost discipline .
- CEO: “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” .
What Went Wrong
- Fibers sales fell 13% y/y (–12% volume mix) on continued acetate tow destocking; EBIT declined in Fibers as volume fell and tariffs add near-term pressure (Naia textiles, cellulose flake into China) .
- Operating cash flow was an outflow of $167M (vs $16M outflow in Q1’24), driven by working capital builds ahead of a heavier Q2 shutdown season; cash/equivalents ended at $418M vs $837M at YE’24 .
- Tariffs: management reduced FY Renew sales expectation to $50–$75M (from $75–$100M) and quantified ~$30M Q2 impact, primarily a volume pause rather than duty absorption; Q2 seasonal uplift expected to be more muted .

Financial Results

Headline results (chronological: Q3 2024 → Q4 2024 → Q1 2025)

Metric	Q3 2024	Q4 2024	Q1 2025
Sales revenue ($USD Billions)	$2.464	$2.245	$2.290
GAAP Diluted EPS ($)	$1.53	$2.82	$1.57
Adjusted EPS ($)	$2.26	$1.87	$1.91
EBIT ($USD Millions)	$329	$349	$302
Adjusted EBIT ($USD Millions)	$366	$305	$311

Notes: Adjusted EBIT margin rose 170 bps y/y in Q1 2025 to 13.6% .

Actual vs Wall Street consensus (S&P Global)

Metric	Q1 2025 Actual	Q1 2025 Consensus	Surprise
Sales revenue ($USD Billions)	$2.290	$2.330*	–$0.040
Adjusted EPS ($)	$1.91	$1.8869*	+$0.02

Values with asterisks retrieved from S&P Global.

Segment revenue (sales) by quarter ($USD Millions)

Segment	Q1 2024	Q4 2024	Q1 2025
Advanced Materials	748	720	719
Additives & Functional Products	704	696	733
Chemical Intermediates	523	503	545
Fibers	331	321	288
Other	4	5	5
Total	2,310	2,245	2,290

Y/Y: AM –4%, AFP +4%, CI +4%, Fibers –13%; sequentially vs Q4: Total +2%, with AFP +5% and CI +8% offset by Fibers –10% .

Segment adjusted EBIT and margins

Segment	Q1 2024 Adj EBIT ($M)	Q1 2024 Margin %	Q4 2024 Adj EBIT ($M)	Q4 2024 Margin %	Q1 2025 Adj EBIT ($M)	Q1 2025 Margin %
Advanced Materials	104	13.9%	107	14.9%	116	16.1%
Additives & Functional Products	109	15.5%	128	18.4%	141	19.2%
Chemical Intermediates	16	3.1%	20	4.0%	19	3.5%
Fibers	117	35.3%	103	32.1%	88	30.6%
Total segments	346	15.0%	358	16.0%	364	15.9%
Other (ex non-core)	(72)	—	(53)	—	(53)	—
Total Co. Adj EBIT	274	11.9%	305	13.6%	311	13.6%

Regional sales mix

Region	Q1 2024 ($M)	Q1 2025 ($M)
United States & Canada	969	1,020
EMEA	659	610
Asia Pacific	564	539
Latin America	118	121
Total	2,310	2,290

KPIs and cash

Cash from operations: $(167)M in Q1 2025 (vs $(16)M in Q1 2024), driven by working capital build ahead of heavier Q2 maintenance; dividends paid $96M; capex $147M; cash/equivalents $418M; net debt $4.603B .
GAAP tax rate 28% in Q1; adjusted full-year ETR assumption 16% .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2025	$8.00–$8.75 (Jan 30)	Withdrawn; moving to quarterly EPS; Q2 adj EPS $1.70–$1.90	Shift to quarterly; added Q2 range
Operating Cash Flow	FY 2025	≈$1.3B (Jan 30)	≈$1.2B	Lowered
Capital Expenditures	FY 2025	$700–$800M discussed (Q4 call)	≈$550M	Reduced
Cost Reduction Target (net of inflation)	FY 2025	≈$50M (Q4 call)	≈$75M	Raised
Dividend	Ongoing	$0.83/qtr (as of Dec’24)	$0.83/qtr declared for Jul 8, 2025	Maintained

Additional Q2 color: ~$30M tariff-related impact (volume), and ~$(20)M sequential headwind from planned turnarounds; Q3 turnaround at similar levels, Q4 eases .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Circular/methanolysis operations & sales	Q3: lower 2024 EBITDA vs plan; downtime then better uptime in Sept; 65–70% run rate periods; explained cost vs volume drivers . Q4: 85% DMT yield since fall turnaround; improving operations into 2025 .	“Best-ever” uptime/production at Kingsport; on track for cost targets; expect ~$50M manufacturing-side EBITDA benefit in 2025; Renew revenue revised to $50–$75M due to tariffs .	Operationally improving; demand timing pressured by tariffs.
Tariffs/trade & macro	Q4: watching policy path; no major forecast embedded yet .	~$30M Q2 tariff impact mainly from customers pausing orders (volume, not duty); muted seasonal Q2 uplift as customers cautious; China-exposed flows discussed by segment .	Headwind intensified near-term.
Fibers destocking/contracts	Q3: inventory management likely continues; France policy slowed contracts for EU project . Q4: 80% of tow volume contracted into 2026; 60–70% into 2027 .	Q1 Fibers volume –12% y/y; destocking persisting; tariffs affect Naia textiles and flake JV; ~90% price under contract for 2025 .	Near-term weaker volumes; pricing stable under contracts.
Capex/Longview DOE	Q3: FID Longview Texas; DOE $375M + Texas incentives; learnings to lower cap cost . Q4: 2025 capex initially framed $700–$800M; DOE funds already flowing .	Capex cut to ~$550M; engineering-first approach to avoid timeline impact; continued confidence in DOE funding .	More disciplined cash posture.
Energy/raw material costs	Q4: higher natural gas forward; Q1 AM margin pinch early-year; paraxylene decline helped Q4 .	Still a factor; mgmt cites smaller puts/takes vs demand trajectory for Q2 .	Mixed; manageable.
Demand in discretionary end-markets	Q3: auto/housing/consumer durables weak; innovation drives AM growth above markets . Q4: stable markets steady; discretionary still below 2019 .	April orders similar to March; seasonal Q2 uplift expected to be less than typical; customer caution, potential June risk if trade not resolved .	Stable to softer near-term until visibility improves.

Management Commentary

“Leveraging our innovation-driven growth model, we delivered a strong quarter in line with expectations... We recorded our best-ever quarter of uptime and production quantities at the Kingsport methanolysis facility…” — Mark Costa, CEO .
“We are... increasing our cost reduction target to approximately $75 million net of inflation and reducing capital expenditures to around $550 million... expect to generate strong operating cash flow of approximately $1.2 billion for full-year 2025... moving to quarterly adjusted earnings per share guidance. Q2 adjusted EPS is expected to be in the range of $1.70 to $1.90.” .
On tariffs: “The [Q2] impact... is an impact on volume as opposed to an impact on duty... customers... can, through this quarter, just not order... It’s a volume hit as opposed to a tariff hit.” .
On Renew revision: “Revision... from $75–$100M of revenue to $50–$75M... purely an end market estimation of the impact of tariffs... nothing to do with the engagement we’re seeing in the marketplace.” .

Q&A Highlights

Tariff impact quantified: ~$30M in Q2, largely from customer order pauses; exposure varies by segment (no CI exposure; manageable AFP exposure; AM exposure tied to performance films and specialty plastics supply chains); management working on localization and customer rerouting .
Demand cadence: Q2 typically sees strong seasonal uplift; this year uplift expected to be “more muted” amid trade uncertainty; April order book holding similar to March .
Fibers: continued destocking despite stable end-market consumption; contracts provide price stability with volume bands; tariffs affect Naia textiles and cellulose flake JV with CNTC .
Capex strategy and Longview: capex cut timed to engineering phase to preserve project timeline; DOE engagement remains supportive; capex mid-point cut from ~$750M to ~$550M for 2025 .
Turnarounds: ~$(20)M sequential headwind in Q2; similar impact in Q3; improvement in Q4 .

Estimates Context

Q1 2025 results vs S&P Global consensus: adjusted EPS $1.91 vs $1.8869* (beat by ~$0.02); revenue $2.290B vs $2.330B* (miss by ~$$0.04B). 15 EPS estimates, 11 revenue estimates informed the consensus .
Implications: Consensus may need to reflect (i) the quarterly EPS guidance framework (Q2 $1.70–$1.90), (ii) $75M cost-reduction plan and capex cut to $550M, (iii) tariff-volume headwind and muted seasonal uplift, and (iv) Renew revenue trimmed to $50–$75M near term .