Q3 2023 Earnings Summary
Reported on Oct 27, 2023 (After Market Close)
Pre-Earnings Price$72.58Last close (Oct 27, 2023)
Post-Earnings Price$72.58Last close (Oct 27, 2023)
Price Change
$0.00(0.00%)
- Eastman expects significant earnings improvement in 2024, driven by the end of destocking—which accounted for about 40% of the volume decline in 2023—and contributions from innovation such as the Kingsport methanolysis plant adding an incremental $75 million in EBITDA, while maintaining cost discipline.
- The Fibers segment has surpassed expectations, with 2023 EBIT projected to be over $410 million compared to the initial estimate of $275 million, due to improved contract structures, pricing, and operational efficiencies. Management is confident in the sustainability of these earnings.
- Eastman is making strong progress in its circular recycling initiatives, with the Kingsport methanolysis plant starting up. Customers are paying the necessary premiums, and costs are performing a little better than expected, positioning the company for growth and margin expansion in sustainable materials.
- Advanced Materials segment EBIT is expected to fall below $400 million in 2023, the lowest since 2014, following a difficult 2022, indicating ongoing challenges and a reliance on significant market improvement for recovery.
- Increasing raw material costs, including methanol, ammonia, and propylene, are impacting margins in the Additives & Functional Products (AFP) segment in Q4 2023, posing a challenge to profitability.
- Continued destocking in key markets like crop protection and medical is expected to impact Q4 2023 results, with uncertain timing of recovery in 2024, potentially delaying volume and earnings improvement.
Research analysts covering EASTMAN CHEMICAL.