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Eastman Announces Fourth-Quarter and Full-Year 2024 Financial Results

1. Eastman Chemical reported strong 2024 earnings growth of 23%. Cash flow generation remains robust. 2. Adjusted EBIT margins improved by 350 basis points year-over-year. Strong volume growth aided performance. 3. Kingsport methanolysis facility is positioned for significant earnings growth in 2025. Innovative growth model expected to drive future performance. 4. Despite economic uncertainty, projected EPS for 2025 is between $8.00-$8.75. Stability anticipated in specialty markets. 5. The company returned ~$700 million to shareholders in 2024 via dividends and repurchases.

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FAQ

Why Bullish?

Eastman’s strong earnings growth and cash flow could enhance investor confidence, similar to past performance during economic recoveries.

How important is it?

Positive earnings growth and cash flow could lead to sustained interest from investors, influencing EMN's market performance.

Why Long Term?

The positive trajectory in earnings and cash flow may have sustained effects, similar to previous years of solid growth.

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EMN
KINGSPORT, Tenn.--(BUSINESS WIRE)--Eastman Chemical Company (NYSE:EMN) announced its fourth-quarter and full-year 2024 financial results. Delivered strong specialty volume/mix growth in Advanced Materials and Additives & Functional Products in the fourth quarter and full year. Delivered adjusted EBIT margin improvement of both 350 basis points in the fourth quarter and 190 basis points in 2024 through volume/mix growth, operating leverage, and commercial excellence. Continued to operate the Kingsport methanolysis facility well in the fourth quarter, positioning the facility to deliver strong earnings growth in 2025. Generated approximately $1.3 billion of cash from operating activities in 2024, demonstrating the strength of our cash flow and our resolve to deliver on our commitments. Returned approximately $700 million to shareholders in 2024 through dividends and share repurchases. (In millions, except per share amounts; unaudited) 4Q24 4Q23 FY24 FY23 Sales revenue $2,245 $2,207 $9,382 $9,210 Earnings before interest and taxes (“EBIT”) 349 477 1,278 1,302 Adjusted EBIT* 305 222 1,298 1,097   Earnings per diluted share 2.82 2.61 7.67 7.49 Adjusted earnings per diluted share* 1.87 1.31 7.89 6.40   Net cash provided by operating activities 540 452 1,287 1,374   *For non-core and unusual items excluded from adjusted earnings and for adjusted provision for income taxes, segment adjusted EBIT margins, and net debt, reconciliations to reported company and segment earnings and total borrowings for all periods presented in this release, see Tables 3A, 3B, 4, and 6. “The fourth quarter capped off a tremendous year for Eastman, with adjusted earnings per share growing 23 percent in 2024,” said Mark Costa, Board Chair and CEO. “As we ended the year, demand was consistent with our expectations, and we saw seasonal declines across our key end markets. 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. Throughout 2024, the Eastman team found ways to deliver earnings in line with our commitments despite facing significant macroeconomic uncertainty and persistently weak end-market demand. We also added to our track record of strong cash generation by delivering $1.3 billion of cash from operations in 2024. Consistent with our capital allocation strategy, we continued our investment in growth and returned a meaningful amount of cash to shareholders. In addition to driving strong financial results, we also successfully started up the world’s largest molecular recycling facility, significantly advancing our leadership position in the circular economy. We operated the Kingsport methanolysis facility well in the fourth quarter and made good progress building our Renew sales funnel. As we head into 2025, we are positioned to leverage our innovation-driven growth model to drive growth above underlying market trends. I am confident in our winning team and their ability to drive resilient earnings and cash flow going forward.” Corporate Results 4Q 2024 versus 4Q 2023 Sales revenue increased 2 percent due to 1 percent higher sales volume/mix and 1 percent higher selling prices. Higher sales volume/mix in Additives & Functional Products and Advanced Materials was mostly offset by lower sales volume/mix in Fibers and Chemical Intermediates. Higher selling prices across Additives & Functional Products, Chemical Intermediates, and Fibers were partially offset by lower selling prices in Advanced Materials. Reported EBIT includes the gain on the sale of Texas City Operations in fourth-quarter 2023. Adjusted EBIT increased due to higher sales volume/mix, improved capacity utilization, and favorable price-cost. Segment Results 4Q 2024 versus 4Q 2023 Advanced Materials – Sales revenue increased 2 percent due to 5 percent higher sales volume/mix partially offset by 3 percent lower selling prices. Higher sales volume/mix was due to the lack of customer inventory destocking across key end markets and continued momentum from our innovation initiatives creating growth above underlying markets. These factors were partially offset by lower selling prices. EBIT increased due to favorable price-cost, higher sales volume/mix, and improved capacity utilization. These factors were partially offset by operating costs associated with Kingsport methanolysis and continued investment in growth. Additives & Functional Products – Sales revenue increased 9 percent due to 7 percent higher sales volume/mix and 2 percent higher selling prices. Higher sales volume/mix was due to the end of destocking in the agriculture end market and stronger demand for aviation fluids. EBIT increased due to higher sales volume/mix, favorable price-cost, improved capacity utilization, and lower planned maintenance costs. Fibers – Sales revenue decreased 7 percent due to 9 percent lower sales volume/mix partially offset by 2 percent higher selling prices. Lower sales volume/mix for acetate tow was driven by year-end customer inventory management. Higher selling prices were primarily for acetate tow. EBIT decreased due to lower sales volume/mix partially offset by favorable price-cost. Chemical Intermediates – Sales revenue decreased 2 percent due to 4 percent lower sales volume/mix partially offset by 2 percent higher selling prices. Lower sales volume/mix was driven by weak end-market demand and year-end customer inventory destocking. Reported EBIT includes the gain on the sale of Texas City Operations in fourth-quarter 2023. Excluding this unusual item, adjusted EBIT was slightly down compared to the prior year period as lower spreads were partially offset by improved capacity utilization. Corporate Results 2024 versus 2023 Sales revenue increased 2 percent due to 4 percent higher sales volume/mix partially offset by 2 percent lower selling prices. Higher sales volume/mix was driven by the end of destocking in most end markets and innovation-driven growth above end-market demand, particularly in the Advanced Materials segment. Lower selling prices were primarily due to lower raw material and energy prices. Reported EBIT includes the gain on the sale of Texas City Operations in fourth-quarter 2023. Adjusted EBIT increased primarily due to higher sales volume/mix and associated capacity utilization as well as favorable price-cost, partially offset by operating costs from new facilities and continued investment in growth. Segment Results 2024 versus 2023 Advanced Materials – Sales revenue increased 4 percent due to 8 percent higher sales volume/mix partially offset by 4 percent lower selling prices. Higher specialty plastics sales volume/mix was driven by the end of customer inventory destocking across key end markets and by continued momentum from our innovation initiatives. Growth above underlying end-market demand in automotive was driven by innovation in premium interlayers products. Lower selling prices were driven by lower raw material and energy prices. EBIT increased due to higher sales volume/mix and improved capacity utilization partially offset by operating costs associated with Kingsport methanolysis and continued investment in growth. Additives & Functional Products – Sales revenue increased 1 percent due to 4 percent higher sales volume/mix mostly offset by 3 percent lower selling prices. Higher sales volume/mix was due to the end of destocking in the agriculture end market as well as growth in stable end markets, including personal care, aviation, and water treatment. Lower selling prices were in part driven by cost-pass-through contracts. EBIT increased due to higher sales volume/mix and favorable price-cost. Fibers – Sales revenue increased 2 percent due to 2 percent higher selling prices. Higher selling prices were due to higher acetate tow contract prices. Sales volume/mix was unchanged as strong growth in Naia™ was offset by a modest decline in acetate tow. EBIT increased due to favorable price-cost. Chemical Intermediates – Sales revenue was flat, as 3 percent higher sales volume/mix was offset by 3 percent lower selling prices. Higher sales volume/mix was primarily driven by reduced customer inventory destocking across most end markets. Lower selling prices were driven by lower raw material and energy prices. Reported EBIT includes the gain on the sale of Texas City Operations in fourth-quarter 2023. Adjusted EBIT decreased as lower spreads were partially offset by lower operating costs. Cash Flow In 2024, cash provided by operating activities was approximately $1.3 billion compared to approximately $1.4 billion in 2023. The modest decrease compared to the prior year period was primarily driven by an increase in working capital in 2024 compared to a decrease in 2023. In 2024, the company returned $679 million to stockholders through dividends and share repurchases. See Table 5. Priorities for uses of available cash for 2025 include organic growth investments, payment of the quarterly dividend, bolt-on acquisitions, and share repurchases. 2025 Outlook Commenting on the outlook for full-year 2025, Costa said: “As we begin 2025, the global economic and geopolitical environment remains highly uncertain. Despite this uncertainty, we are confident in our ability to generate growth across our portfolio as we build upon a strong year in 2024. First, we expect modest volume growth in our specialty businesses, and we will continue to leverage our innovation-driven growth model to deliver growth above underlying challenged market trends. Across our consumer discretionary end markets, we are not projecting any underlying demand improvement in 2025. Across our more stable markets, we are projecting modest demand growth. A key driver of our innovative growth will be our circular platform as we remain on track with our 2025 commitments of $75 million-$100 million EBITDA growth shared recently at our Circular Deep Dive event. And finally, we will reduce structural costs to more than offset inflation while continuing to invest in growth and capabilities for long-term value creation. Partially offsetting these factors include headwinds related to higher energy costs, a stronger U.S. dollar, and customer inventory management in the Fibers business. Taking this together, we expect 2025 EPS to be between $8.00-$8.75 and for 2025 cash from operations to be approximately $1.3 billion.” The full-year 2025 projected adjusted diluted EPS and Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) exclude any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS and EBITDA excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS or net earnings without unreasonable efforts. Forward-Looking Statements This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, statements of management’s plans, strategies and objectives for future operations, and statements regarding future economic, industry or market conditions or performance. Such projections and estimates are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and as updated in the company’s filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov and the company’s website at www.eastman.com. Conference Call and Webcast Information Eastman will host a conference call with industry analysts on Jan. 31, 2025, at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides and prepared remarks, go to investors.eastman.com, Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available at investors.eastman.com at approximately 4:30 p.m. ET on Jan. 30, 2025. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 793608. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available at investors.eastman.com, Events & Presentations. A telephone replay will be available continuously beginning at approximately 1:00 p.m. ET, Jan. 31, 2025, through 11:59 p.m. ET, Feb. 9, 2025, Toll Free at +1 (866) 813-9403, passcode 540646. Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive company, Eastman employs approximately 14,000 people around the world and serves customers in more than 100 countries. The company had 2024 revenue of approximately $9.4 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.

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