Eastman Chemical's Q3 Earnings and Sales Miss on Weaker Demand

Eastman Chemical Company EMN logged third-quarter 2025 earnings of 40 cents per share, a roughly 74% decline from the year-ago quarter's figure of $1.53.

EMN posted adjusted earnings of $1.14 per share, down from the year-ago quarter figure of $2.26. It lagged the Zacks Consensus Estimate of $1.18.

The company’s revenues in the third quarter were $2,202 million, down around 10.6% year over year. It missed the Zacks Consensus Estimate of $2,242 million. 

EMN’s significant challenges continued in the third quarter. The company took actions to reduce inventory and focus better on cash generation, disciplined capital allocation, and structural cost reduction.

Eastman Chemical Company Price, Consensus and EPS Surprise

Eastman Chemical Company price-consensus-eps-surprise-chart | Eastman Chemical Company Quote

EMN’s Segment Highlights

Advanced Materials: Sales from the segment fell 7% year over year to $728 million in the reported quarter. The figure missed our estimate of $742.1 million. Sales revenues declined due to lower sales volume and mix resulting from weak demand in high-value consumer discretionary end markets.

Additives & Functional Products: Sales from the segment were $716 million, reflecting a decline of 4% from the year-ago quarter. The figure missed our estimate of $735.4 million. Sales were dampened by lower sales volume due to the timing of heat transfer fluid project completions and continued weak demand in the building and construction and auto refinish end markets.

Chemical Intermediaries: Sales from the segment were down 16% year over year to $499 million. The figure missed our estimate of $514.4 million. Sales declined due to 8 percent lower sales volume and mix from continued weak market demand in the North American building and construction end market.

Fibers: The segment reported sales of $254 million, down 24% year over year. The figure lagged our estimate of $286.8 million. Sales declined primarily due to lower sales volume and mix as a result of lower acetate tow volume.

EMN’s Financials

The company ended the quarter with cash and cash equivalents of $489 million. Net debt was $4,586 million. 

Cash provided by operating activities was $402 million, up around 1.5% year over year.

EMN returned $146 million to shareholders through dividends and share repurchases in the reported quarter.

EMN’s Guidance

EMN noted that it is seeing a challenging global macroeconomic environment. Customers are increasingly cautious due to a changing tariff environment and soft demand. The company expects to gain from the ramp-up of cost-reduction initiatives and higher revenues from its Kingsport methanolysis facility. The company aims to cut over $75 million in costs this year and roughly $100 million in 2026, with lower shutdown expenses and slightly better plant efficiency.

EMN sees full-year adjusted earnings to be $5.40-$5.65 per share. It also expects to generate an operating cash flow of around $1 billion for the full year.

EMN’s Price Performance

EMN’s shares are down 40.2% over a year compared with a 36.1% decline recorded by the Zacks Chemicals Diversified industry.

EMN’s Zacks Rank & Key Picks

EMN currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks worth a look in the basic materials space are Royal Gold, Inc. RGLD, Avino Silver & Gold Mines Ltd. ASM and Fortuna Mining Corp. FSM.

Royal Gold is scheduled to report third-quarter results on Nov. 5. The Zacks Consensus Estimate for RGLD’s third-quarter earnings is pegged at $2.30 per share. RGLD’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 8.95%. Royal Gold currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avino Silver is slated to report third-quarter results on Nov. 6. The Zacks Consensus Estimate for third-quarter earnings is pegged at 3 cents per share. ASM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 141.67%. Avino Silver carries a Zacks Rank #2 (Buy) at present.

Fortuna Mining is scheduled to report third-quarter results on Nov. 5. FSM carries a Zacks Rank #2 at present. Fortuna Mining’s earnings beat the consensus estimate in one of the last four quarters and missed three times.

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This article originally published on Zacks Investment Research (zacks.com).

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