Sign in
EC

EASTMAN CHEMICAL CO (EMN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 sales were $2.245B, up 2% YoY; adjusted EPS was $1.87 versus $1.31 YoY, with adjusted EBIT margin up 350 bps to 13.6% on volume/mix growth, operating leverage, and favorable price-cost .
  • Sequentially, sales declined 9% vs Q3 due to normal seasonality across segments; AFP and AM outperformed on specialty mix, while CI and Fibers saw year-end destock and weaker end-market demand .
  • 2025 guidance introduced: adjusted EPS $8.00–$8.75 and ~$1.3B cash from operations; management targeted $75–$100M circular platform incremental EBITDA (≈$50M in AM) and $50M net structural cost reductions to offset inflation .
  • Circular catalyst: Kingsport methanolysis operated well exiting Q4 (85% DMT/DMP yield since the fall turnaround), positioning for stronger 2025 earnings; demand funnel is solid though pacing moderated by macro uncertainty .

What Went Well and What Went Wrong

  • What Went Well

    • Specialty volume/mix growth and commercial discipline lifted margins: “Adjusted EBIT margin increased 350 basis points compared to last year and was supported by higher sales volume/mix, strong operating leverage, and commercial excellence.” — Mark Costa, CEO .
    • AFP delivered a strong sequential quarter on volume/mix and raw material flow-through, outperforming typical seasonal dip .
    • Kingsport methanolysis operating metrics improved post-turnaround; yield at ~85% since fall shutdown and rising uptime supports 2025 leverage .

  • What Went Wrong

    • Sequential sales and volumes declined with seasonality: Q4 total revenue fell 9% vs Q3 across segments (AM −9%, AFP −6%, CI −15%, Fibers −4%) .
    • CI faced weaker spreads and year-end inventory management; adjusted EBIT slightly down YoY excluding prior-year Texas City gain .
    • Fibers saw year-end destocking and a profitable product discontinuation; energy and currency are additional 2025 headwinds .

Financial Results

  • Consolidated performance versus prior quarters
MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$2.363 $2.464 $2.245
Diluted EPS (GAAP)$1.94 $1.53 $2.82
Adjusted EPS (Non-GAAP)$2.15 $2.26 $1.87
Adjusted EBIT ($USD Millions)$353 $366 $305
Adjusted EBIT Margin (%)N/A14.9% 13.6%
  • Year-over-year comparison for Q4
MetricQ4 2023Q4 2024
Revenue ($USD Billions)$2.207 $2.245
Diluted EPS (GAAP)$2.61 $2.82
Adjusted EPS (Non-GAAP)$1.31 $1.87
Adjusted EBIT Margin (%)10.1% 13.6%
  • Segment sales and adjusted margins
SegmentSales Q3 2024 ($MM)Sales Q4 2024 ($MM)Adjusted EBIT Margin Q3 2024Adjusted EBIT Margin Q4 2024
Advanced Materials$787 $720 15.5% 14.9%
Additives & Functional Products$744 $696 17.5% 18.4%
Chemical Intermediates$593 $503 7.3% 4.0%
Fibers$336 $321 33.3% 32.1%
Total (Segments)$2,460 $2,240 16.5% 16.0%
Total Company$2,464 $2,245 14.9% 13.6%
  • KPIs and cash metrics
KPIQ4 2024FY 2024
Cash From Operations ($MM)$540 $1,287
Net Debt ($MM)$4,180 (Dec 31, 2024) $4,180 (Dec 31, 2024)
Cash & Equivalents ($MM)$837 (Dec 31, 2024) $837 (Dec 31, 2024)
Shares Outstanding (End of Period, MM)115.2 115.2
Returns to Shareholders ($MM)N/A$679 (dividends + buybacks)
  • Non-GAAP reconciliation highlights (Q4)
    • Adjusted EPS reflects exclusions including mark-to-market pension/OPEB gain of $(0.34) per share and interim tax provision adjustments of $(0.76) per share .
    • Adjusted EBIT excludes non-core/unusual items such as asset impairments/restructuring and environmental/other costs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025N/A$8.00–$8.75 New
Cash From OperationsFY 2025N/A≈$1.3B New
Circular Platform Incremental EBITDAFY 2025N/A$75–$100M (≈$50M in AM) New
Structural Cost Reduction (Net)FY 2025≈$75M prior program context $50M net incremental in 2025 New
Capex (net of DOE grants)FY 2025≈$625–$800M 2024 context $700–$800M expected (net of DOE receipts) New
Dividend (Quarterly)Q2 2025 Payable$0.83 (raised Dec 2024) $0.83 payable Apr 7, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Circular economy / Kingsport methanolysisRamping operations; introduced harder-to-recycle feedstocks; volume/mix tailwind Uptime challenges improved by September; EBITDA bridge weighted to cost leverage into 2025 Running well post-turnaround; ~85% yield; improved uptime; sales ramp paced by macro; 2025 AM contribution expected Improving operational execution; demand funnel intact, pacing moderated
Tariffs/macro policyMacro weak; destocking largely complete; cautious H2 Macro uncertainty heading into elections; brands cautious; CI spreads mixed Trade actions under review; forecast excludes tariff impacts; management sees limited direct exposure Elevated policy uncertainty; limited direct impact assumed
Advanced Materials (auto interlayers, films)AM volume/mix growth; premium interlayers strength High single-digit outperformance vs auto market; mix lift (HUD, acoustic, solar rejection); films growing modestly AM growth continues; H1 margin pinch from energy/currency and cost reclassification; back-half benefit from circular ramp Structural growth via innovation; near-term cost headwinds
Additives & Functional Products (coatings, fluids)Price discipline; some fluids weakness Strong execution; fluids, coatings, care chemicals wins; better-than-expected volumes Sequential strength in Q4 on volume/mix and RM flow-through; stability expected in 2025 Stable growth with commercial excellence
Chemical Intermediates (acetyls/olefins)Lower selling prices; spreads down Spreads improved vs 2023; more volume post maintenance Competitively pressured; volume and reliability investments to offset spreads; minimal currency exposure Stabilizing spreads; volume helps offset
Fibers (tow, Naia)Price increases; textiles growth Stable utilization; multi-year contracts; inventory management likely Year-end destock; specific high-value product discontinued; energy and FX headwinds; multi-year contracts through 2026–27 Normalization from strong 2024; still attractive margins

Management Commentary

  • “The fourth quarter capped off a tremendous year for Eastman… Adjusted EBIT margin increased 350 basis points… We also successfully started up the world’s largest molecular recycling facility… We operated the Kingsport methanolysis facility well in the fourth quarter and made good progress building our Renew sales funnel.” — Mark Costa, CEO .
  • “We’re at 85% DMP/DMT yield since our fall turnaround and uptime continues to improve… well positioned for strong operating rate in 2025 from both higher production and reduced operational spend.” — Willie McLain, CFO .
  • On macro/trade: “Our forecast does not include any significant impact from the trade actions.” — Mark Costa .
  • On cost actions: “To stay competitive… that $50 million will be key. And we’re not standing still. We’re moving forward aggressively on this plan.” — Willie McLain .

Q&A Highlights

  • AM guidance dynamics: H1 headwinds from natural gas and currency; ~$25M cost shifting into AM in Q1; back-half uplift from circular ramp and cost reductions .
  • Kingsport performance: Post-turnaround yield ~85%; rising uptime; 2025 operating leverage expected; sales ramp paced by customer innovation cycles and macro .
  • AFP sequential strength: Better-than-expected volume/mix and raw material flow-through; additional heat transfer fills supported Q4 beat .
  • Fibers visibility: Multi-year contracts (≈80% in 2026; ≈60–70% in 2027); normalization driven by inventory management, energy/currency; discontinued high-value product .
  • Capital allocation and capex: 2025 capex $700–$800M net of DOE; dividend maintained; buybacks flexible with strong net debt/EBITDA position .

Estimates Context

  • Consensus estimates from S&P Global were unavailable at time of writing due to request limits; as a result, we cannot quantify beat/miss vs Q4 2024 consensus for EPS, revenue, or EBITDA at this time. Values would normally be retrieved from S&P Global; unavailable in this instance.
  • Given management’s commentary and reported results, we expect near-term estimate revisions to reflect:
    • Stronger Q1 specialty volume/mix offsetting Fibers destock, but H1 AM margin pinch from energy/currency and cost reclassification .
    • Back-half 2025 improvements tied to circular EBITDA ramp ($75–$100M company-wide; ≈$50M AM) and cost reductions ($50M net) .

Key Takeaways for Investors

  • Mix-led margin resilience persists: Q4 adjusted EBIT margin rose to 13.6% with AFP and AM executing well despite seasonal declines and CI/Fibers headwinds .
  • Circular platform is a 2025 earnings lever: Improved yields and uptime plus sales funnel progression support the $75–$100M incremental EBITDA target; expect back-half skew .
  • Cost discipline is a core offset: $50M net structural reductions targeted to more than offset inflation, alongside energy efficiency and asset optimization .
  • Macro/tariff risk manageable: Limited direct exposure assumed; CI pressures expected to be offset by reliability-driven volume and cost actions .
  • Fibers normalization from a strong base: Inventory management and specific product changes temper 2025, but multi-year contracts underpin stability; margins remain attractive .
  • Capital allocation intact: Dividend at $0.83 maintained; capex concentrated on Longview, Texas (net of DOE), with flexibility for buybacks as conditions warrant .
  • Near-term trading lens: Watch Q1 specialty volume/mix vs Fibers destock, AM margin impact from energy/currency, and any tariff headlines; back-half catalyst is circular EBITDA delivery with improving KPIs .

Additional source materials:

  • Q4 2024 press release and financial tables .
  • 8-K with full tables and reconciliations .
  • Q4 2024 earnings call transcripts (two sources) – –.
  • Prior quarters: Q3 2024 press release and call – –; Q2 2024 press release –.