Why Is Eastman Chemical (EMN) Up 0.4% Since Last Earnings Report?

A month has gone by since the last earnings report for Eastman Chemical (EMN). Shares have added about 0.4% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Eastman Chemical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.

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

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

The company 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 roughly $2.2 billion, down around 10.6% year over year. It missed the Zacks Consensus Estimate of $2.24 billion. 

Eastman Chemical’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.

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.

Financials

The company ended the quarter with cash and cash equivalents of $489 million. Net debt was roughly $4.59 billion. 

Cash provided by operating activities was $402 million, up around 1.5% year over year.
Eastman Chemical returned $146 million to shareholders through dividends and share repurchases in the reported quarter.

Guidance

Eastman Chemical 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.

Eastman Chemical 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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -24.73% due to these changes.

VGM Scores

Currently, Eastman Chemical has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock has a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Eastman Chemical has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Eastman Chemical is part of the Zacks Chemical - Diversified industry. Over the past month, Dow Inc. (DOW), a stock from the same industry, has gained 5.6%. The company reported its results for the quarter ended September 2025 more than a month ago.

Dow Inc. reported revenues of $9.97 billion in the last reported quarter, representing a year-over-year change of -8.3%. EPS of -$0.19 for the same period compares with $0.47 a year ago.

Dow Inc. is expected to post a loss of $0.45 per share for the current quarter, representing a year-over-year change of 0%. Over the last 30 days, the Zacks Consensus Estimate has changed -15%.

Dow Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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

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