Eastman Chemical's Q4 Earnings and Sales Lag on Weak Demand

Eastman Chemical Company EMN logged fourth-quarter 2025 earnings of 92 cents per share, a roughly 67% decline from the year-ago quarter's figure of $2.82.

EMN posted adjusted earnings of 75 cents per share, down from the year-ago quarter figure of $1.87. It lagged the Zacks Consensus Estimate of 76 cents.

The company’s revenues in the fourth quarter were $1,973 million, down around 12% year over year. It missed the Zacks Consensus Estimate of $2,037.2 million. Lower volumes and selling prices hurt the topline.

EMN faced a challenging environment in the fourth quarter with sustained demand weakness in consumer discretionary end markets. Also, customer inventory destocking in acetate tow continued in the quarter. 

The company surpassed its cost reduction target in 2025, having achieved roughly $100 million in savings versus its goal of more than $75 million.

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 9% year over year to $656 million in the reported quarter. The figure missed our estimate of $664.6 million. Sales declined due to lower sales volume and mix resulting from weak demand in high-value consumer discretionary end markets and higher seasonal volume declines due to inventory destocking.

Additives & Functional Products: Sales from the segment were $662 million, reflecting a decline of 5% from the year-ago quarter. The figure missed our estimate of $671.6 million. Sales were dampened by lower sales volume due to continued weak demand in the building and construction and auto refinish end markets.

Chemical Intermediaries: Sales from the segment were down 17% year over year to $418 million. The figure was below our estimate of $467.8 million. Sales declined due to lower sales volume and mix from continued weak market demand in the North American building and construction end market. Selling prices also fell due to increased competitive pressure from Asia.

Fibers: The segment reported sales of $234 million, down 27% year over year. The figure beat our estimate of $211.2 million. Sales declined primarily due to lower sales volume and mix as a result of lower acetate tow volume due to destocking.

EMN’s Financials

The company ended the quarter with cash and cash equivalents of $566 million, down around 32% year over year. Net debt was $4,221 million, up roughly 1% year over year. 

Cash provided by operating activities was $502 million in the quarter, down around 7% year over year. EMN also generated cash from operating activities of nearly $1 billion in 2025 amid a challenging backdrop.

EMN returned roughly $500 million to shareholders through dividends and share repurchases in 2025.

EMN’s Guidance

Eastman Chemical noted that it remains focused on strategic measures amid the challenging macroeconomic environment, which continues to impact the industry. It is beefing up cost reduction actions to a range of $125-$150 million, building upon the actions taken last year.

The company also expects to benefit from its innovation-driven model, improved manufacturing utilization and favorable foreign currency exchange rates. EMN expects to meaningfully improve earnings on a year-over-year basis in 2026 and sees operating cash flow to be similar to 2025.

For the first quarter, the company expects a significant increase in adjusted earnings per share from the fourth quarter of 2025, driven by strong growth in volume/mix and lower customer caution after year-end customer inventory actions. Reduced shutdown costs, improved utilization and cost-reduction actions are also expected to aid earnings. These benefits are expected to be partly masked by slightly lower prices in Fibers and Chemical Intermediates and higher energy costs.

EMN sees first-quarter adjusted earnings to be in the band of $1.00-$1.20 per share, barring the potential impacts from the winter storms.

EMN’s Price Performance

EMN’s shares are down 30.7% over a year compared with a 21.8% decline recorded by the Zacks Chemicals Diversified industry.

EMN’s Zacks Rank & Key Picks

EMN currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth a look in the basic materials space include Albemarle Corporation ALB, Coeur Mining, Inc. CDE and Avino Silver & Gold Mines Ltd. ASM.

Albemarle is slated to report fourth-quarter results on Feb. 11. The Zacks Consensus Estimate for earnings is pegged at a loss of 54 cents. ALB beat the Zacks Consensus Estimate in three of the last four quarters while missing it in one, with the average earnings surprise being 35.3%. ALB carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

Coeur is scheduled to report fourth-quarter results on Feb. 18. The Zacks Consensus Estimate for CDE’s fourth-quarter earnings is pegged at 33 cents. CDE beat the Zacks Consensus Estimate in two of the last two quarters and missed twice, with the average earnings surprise being 106.6%. CDE currently carries a Zacks Rank #1. 

Avino Silver is slated to report fourth-quarter results on March 11. The consensus estimate for ASM’s earnings is pegged at 6 cents. ASM, carrying a Zacks Rank #2 (Buy), beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 150%. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research