Core Points - Eastman Chemical Company's CFO Willie McLain will present at the Citi Basic Materials Conference on December 2, 2025, at 10:50 a.m. ET [1][6] - The presentation will be available via live webcast on the company's investor relations website, with an audio replay accessible afterward [1][6] Financial Results - Eastman has scheduled the release of its third-quarter 2025 financial results, including an SEC Form 8-K filing, teleconference, and webcast [5] Corporate Recognition - Eastman has been recognized as one of the 100 Best Corporate Citizens for 2025 by 3BL, a notable sustainability communications partner [6]

Core Viewpoint - Eastman Chemical Company (EMN) has significantly underperformed the market, with a 44.7% decline over the past year compared to a 12.3% increase in the S&P 500 Index [2] Financial Performance - EMN reported Q3 results with an adjusted EPS of $1.14, missing Wall Street expectations of $1.18, and revenue of $2.20 billion, which also fell short of forecasts of $2.24 billion [4] - For the current fiscal year ending in December, analysts expect EMN's EPS to decline by 30% to $5.52 on a diluted basis [5] Analyst Ratings and Price Targets - Among 15 analysts covering EMN, the consensus rating is a "Moderate Buy," with eight "Strong Buy" ratings, two "Moderate Buys," four "Holds," and one "Strong Sell" [5] - Evercore ISI maintained an "In Line" rating on EMN and lowered the price target to $70, indicating a potential upside of 21.7% from current levels [6] - The mean price target of $71.47 suggests a 24.3% premium to EMN's current price, while the highest price target of $80 indicates a potential upside of 39.1% [6] Market Comparison - EMN's stock has underperformed compared to the Materials Select Sector SPDR Fund (XLB), which has declined about 7% year-to-date, while EMN has experienced double-digit losses [3]

Core Insights - The article discusses the investment strategies and expertise of Fred Piard, a quantitative analyst with over 30 years of experience in technology and systematic investing since 2010 [1]. Group 1: Investment Strategies - Fred Piard runs the investing group Quantitative Risk & Value, focusing on quality dividend stocks and companies leading in tech innovation [1]. - The group also provides market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds [1].

Core Insights - Eastman Chemical Company (NYSE:EMN) is recognized as one of the 15 overlooked dividend stocks to consider for investment [1] - BofA has increased its price target for Eastman Chemical to $75 from $74 while maintaining a Buy rating, citing potential earnings growth in 2026 due to cost savings and improved asset utilization [2] - The company aims for $100 million in cost savings in 2026, building on $75 million achieved in the current year, with potential utilization boosts contributing an additional $50 million to $75 million [3] Financial Performance - Eastman Chemical reported Q3 2025 revenue of $2.2 billion, reflecting a 10.6% year-over-year decline and falling short of analysts' estimates by $73.4 million [4] - Despite the revenue drop, the company generated $402 million in operating cash flow, consistent with the same quarter last year, and returned $146 million to shareholders through dividends and share repurchases [4] Company Overview - Eastman Chemical is a global specialty materials firm that produces a diverse range of advanced materials, chemicals, and fibers utilized in everyday products [5]

Summary of the Conference Call on China's Chemical Sector Industry Overview - The conference focused on the transformation of China's chemical sector under the anti-involution policy, aiming for a domestic supply-demand balance by the end of the decade with over 90% of production consumed within China [1][2][3]. Key Points and Arguments 1. **Transformation and Upgrades**: China's chemical sector is undergoing significant changes driven by the anti-involution policy and the upcoming 15th Five Year Plan, focusing on upgrading existing assets and phasing out obsolete equipment to prioritize higher-value products [2][3]. 2. **Capacity Reductions**: Approximately 3 million tons per year (tpy) of capacity is being eliminated, particularly older naphtha cracking units, with impacts expected on supply-demand balances around 2028-2029 [3][4]. 3. **Producer Dynamics**: New ethylene and propylene capacities are concentrated among state-owned enterprises (SOEs) and large private players, focusing on higher-margin derivatives. Shutdowns for private producers occur when margin losses exceed approximately 1,000 RMB/t for 2-3 years [4][11]. 4. **Global Implications**: The global petrochemical market may face risks as mid-cycle conditions could shift lower due to efficiency gains at the higher end of the cost curve. Current policies are favorable for companies rated as Buy, such as ALB and LAC, while EMN and MEOH could benefit from more aggressive reforms [5][33]. 5. **Ethylene Capacity Growth**: China's ethylene capacity is projected to reach 98 million tpy by 2029, with a compound annual growth rate (CAGR) of 12% from 2024 and 9.8% from 2020. Domestic demand for ethylene is expected to grow by 64% by 2028 [7][8]. 6. **Propylene Market Dynamics**: China holds approximately 38% of the global propylene market, with domestic sufficiency at around 96%. The competition is more fragmented compared to ethylene, with the top five producers accounting for only about 15% of the market [11][12]. 7. **Policy Approach**: The government is adopting a more cautious policy approach towards new ethylene projects, emphasizing stability and gradual rationalization rather than abrupt cuts [9][10]. 8. **Strategic Risks**: Ethane sourcing remains a strategic risk, with most ethane for ethylene production still imported from the U.S., raising tariff concerns [17]. Additional Important Insights - The anticipated wave of new capacity additions in ethylene is expected to peak in 2026, with significant additions in derivatives like polyethylene (PE) and monoethylene glycol (MEG) through 2029 [8][12]. - The restructuring of the propylene sector is driven by policy measures and market forces, focusing on technology upgrades and consolidation rather than new entrants [14][15]. - The crude oil to chemicals (CTC) projects remain uncertain, with potential delays but expected to yield significant olefins and aromatics if realized [16]. This summary encapsulates the critical insights from the conference call regarding the evolving landscape of China's chemical industry, highlighting both opportunities and risks for investors.

Core Insights - High-purity manganese is increasingly utilized in electric vehicle (EV) batteries and is expected to play a more significant role as the EV market and energy storage sectors expand [2] - The majority of high-purity manganese, over 90%, is processed in China, which presents technology and supply chain risks, highlighting the importance of the Chvaletice Manganese Project in the Czech Republic [3] Company Overview - Euro Manganese is developing the Chvaletice Manganese Project, which is the only sizable manganese deposit in Europe and the only integrated project that combines the deposit and processing [3][4] - The Czech Republic, as a member of the EU, provides a stable and business-friendly environment for the company's operations, which have been ongoing for nearly 10 years [3]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Analyst Ratings and Price Targets - Huntsman Corporation (NYSE:HUN) has a dividend yield of 12.67%. Mizuho analyst John Roberts maintained an Underperform rating and reduced the price target from $9 to $8, while Jefferies analyst Laurance Alexander maintained a Buy rating and lowered the price target from $15 to $14 [8] - International Paper Co (NYSE:IP) has a dividend yield of 5.06%. Citigroup analyst Anthony Pettinari maintained a Buy rating and cut the price target from $55 to $46, while Wells Fargo analyst Gabe Hajde maintained an Underweight rating and slashed the price target from $44 to $36 [8] - Eastman Chemical Co (NYSE:EMN) has a dividend yield of 5.47%. Mizuho analyst John Roberts maintained an Outperform rating and reduced the price target from $80 to $75, while Morgan Stanley analyst Vincent Andrews maintained an Overweight rating and cut the price target from $125 to $115 [8] Group 2: Recent News - Huntsman Corporation will hold a conference call on November 7 to discuss its third-quarter 2025 financial results [8] - International Paper reported third-quarter results below estimates on October 30 [8] - Eastman Chemical posted disappointing quarterly results on November 3 [8]

Financial Performance - Sales for Q3 2025 were $2,202 million, a decrease of 10.6% compared to $2,464 million in Q3 2024[15] - Gross profit for Q3 2025 was $433 million, down 28.4% from $605 million in Q3 2024[15] - Net earnings attributable to Eastman for Q3 2025 were $47 million, a significant decline of 73.9% compared to $180 million in Q3 2024[15] - Basic earnings per share attributable to Eastman for Q3 2025 were $0.41, down from $1.55 in Q3 2024[15] - The company reported a comprehensive income attributable to Eastman of $69 million for Q3 2025, compared to $204 million in Q3 2024[15] - Net earnings for the third quarter of 2025 were $47 million, compared to $180 million in the same quarter of 2024, representing a decrease of approximately 74.2%[90] - Basic EPS for Q3 2025 was $0.41, down from $1.55 in Q3 2024, while diluted EPS decreased from $1.53 to $0.40[99] - Total income and expense recognized from fair value and cash flow hedges for the third quarter of 2025 was $2,202 million, compared to $1,769 million in 2024, reflecting an increase of 24.4%[73] Assets and Liabilities - Total assets as of September 30, 2025, were $14,979 million, a decrease from $15,213 million as of December 31, 2024[17] - Total liabilities as of September 30, 2025, were $9,136 million, slightly down from $9,361 million as of December 31, 2024[17] - Total borrowings as of September 30, 2025, amounted to $5,075 million, an increase from $5,017 million on December 31, 2024[44] - The company’s long-term borrowings were $4,785 million as of September 30, 2025, compared to $4,567 million on December 31, 2024[44] - Total stockholders' equity as of September 30, 2025, was $5,843 million, a decrease from $5,728 million as of September 30, 2024[92] Cash Flow and Operating Activities - Net cash provided by operating activities for the first nine months of 2025 was $468 million, compared to $747 million in the same period of 2024[20] - Cash and cash equivalents at the end of Q3 2025 were $489 million, down from $837 million at the beginning of the period[20] - The company sold $696 million in accounts receivable under its factoring program in the third quarter of 2025, compared to $703 million in the same period of 2024[34] Research and Development - Research and development expenses for Q3 2025 were $63 million, a slight decrease from $65 million in Q3 2024[15] Tax and Regulatory Matters - The provision for income taxes for the third quarter of 2025 was $87 million, with a tax rate of 65%, compared to $99 million and a 35% tax rate in the third quarter of 2024[41] - The company had $353 million in unrecognized tax benefits as of September 30, 2025, up from $321 million on December 31, 2024[42] Environmental and Remediation Liabilities - Estimated future environmental expenditures for undiscounted remediation costs ranged from $289 million to $499 million as of September 30, 2025, compared to $252 million to $495 million at December 31, 2024[84] - The Company's net environmental reserve for environmental contingencies totaled $322 million as of September 30, 2025, an increase from $284 million at December 31, 2024[83] - Environmental remediation liabilities increased to $289 million as of September 30, 2025, from $252 million at December 31, 2024, reflecting changes in estimates recognized in earnings[85] Shareholder Returns - Cash dividends declared in Q3 2025 were $0.83 per share, totaling $95 million, compared to $0.81 per share and $94 million in Q3 2024[90] - The company reported a share repurchase of $50 million in Q3 2025, compared to $100 million in Q3 2024[90] - The balance of retained earnings as of September 30, 2025, was $10,095 million, down from $9,780 million as of September 30, 2024[92] Other Comprehensive Income - Other comprehensive income (loss) for Q3 2025 included a loss of $22 million, while Q3 2024 reported a loss of $24 million[90] - The net unrealized loss in AOCI increased to $131 million as of September 30, 2025, from a net unrealized gain of $154 million at December 31, 2024, primarily due to changes in euro to U.S. dollar exchange rates[76] Segment Performance - The Advanced Materials segment reported sales of $728 million in Q3 2025, down from $787 million in Q3 2024, a decrease of 7.5%[121] - The Additives & Functional Products segment sales were $716 million in Q3 2025, compared to $744 million in Q3 2024, a decline of 3.8%[121] - The Chemical Intermediates segment generated sales of $499 million in Q3 2025, down from $593 million in Q3 2024, a decrease of 15.9%[121] Expenses - Selling, general and administrative expenses for Q3 2025 were $145 million, compared to $170 million in Q3 2024, a reduction of 14.7%[116] - Share-based compensation expense for Q3 2025 was $13 million, compared to $14 million in Q3 2024[90]

Core Insights - Eastman Chemical Company (EMN) reported third-quarter 2025 earnings of 40 cents per share, a decline of approximately 74% from $1.53 in the same quarter last year [1] - Adjusted earnings were $1.14 per share, down from $2.26 year over year, and below the Zacks Consensus Estimate of $1.18 [1] - Revenues for the third quarter were $2,202 million, a decrease of around 10.6% year over year, missing the Zacks Consensus Estimate of $2,242 million [1] Segment Performance - **Advanced Materials**: Sales fell 7% year over year to $728 million, missing the estimate of $742.1 million due to lower sales volume and weak demand in high-value consumer discretionary markets [3] - **Additives & Functional Products**: Sales were $716 million, down 4% from the previous year, missing the estimate of $735.4 million, impacted by lower sales volume and weak demand in building and construction and auto refinish markets [4] - **Chemical Intermediaries**: Sales decreased 16% year over year to $499 million, missing the estimate of $514.4 million, due to an 8% decline in sales volume from weak market demand in North American building and construction [5] - **Fibers**: Sales reported at $254 million, down 24% year over year, lagging behind the estimate of $286.8 million, primarily due to lower acetate tow volume [6] Financial Overview - The company ended the quarter with cash and cash equivalents of $489 million and net debt of $4,586 million [7] - Operating cash flow was $402 million, up approximately 1.5% year over year [7] - EMN returned $146 million to shareholders through dividends and share repurchases during the quarter [7] Guidance and Outlook - EMN anticipates a challenging global macroeconomic environment with cautious customer behavior due to changing tariffs and soft demand [8] - The company aims to cut over $75 million in costs this year and approximately $100 million in 2026, focusing on lower shutdown expenses and improved plant efficiency [8] - Full-year adjusted earnings are projected to be between $5.40 and $5.65 per share, with an expected operating cash flow of around $1 billion [9] Stock Performance - EMN's shares have declined by 40.2% over the past year, compared to a 36.1% decline in the Zacks Chemicals Diversified industry [11]

Financial Data and Key Metrics Changes - The company is experiencing a challenging environment with a projected decline in full-year volumes, specifically around 4% in Advanced Materials (AM) and 2% in AFP [10][11] - Cost reduction efforts have been significant, with $75 million achieved this year and a target of $100 million for the next year [12][76] - The company anticipates a utilization tailwind of $50-$75 million depending on volume growth in the upcoming year [12][56] Business Line Data and Key Metrics Changes - The Advanced Materials segment is expected to see a decline of approximately 4% for the full year, while AFP is projected to decline by around 2% [10][11] - The fibers business is facing cyclical challenges, particularly in textiles, which have seen a significant headwind due to tariffs and market conditions [34][49] - The company is optimistic about the ARPET capacity conversion, expecting a significant increase in volume and revenue from this initiative [19][20] Market Data and Key Metrics Changes - Consumer durable demand is projected to be 5-15% below 2019 levels, impacting the overall market dynamics [29] - The company is seeing a mixed impact from trade regulations, with tariffs providing some protection to margins in North America [43][44] - The North American market remains attractive due to higher margins, but demand has been affected by the ongoing manufacturing recession [42][44] Company Strategy and Development Direction - The company is focusing on innovation as a core part of its strategy, particularly in the circular polyester methanolysis plant and other specialty products [13][84] - There is an emphasis on aggressive cost management alongside innovation to navigate the current market challenges [12][84] - The company is exploring opportunities for portfolio optimization and potential M&A to enhance its competitive position [84][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the chaotic market conditions and the difficulty in predicting demand trends due to inventory levels and consumer behavior [72][74] - There is cautious optimism regarding a potential recovery in demand, particularly in the first quarter of the next year [25][74] - The company is committed to maintaining cash flow and dividend stability while navigating the current economic environment [67][76] Other Important Information - The company has completed $50 million in buybacks in addition to its dividend in Q3, maintaining a disciplined approach to capital allocation [51][76] - The management has indicated that the headcount reduction of 7% is part of a broader strategy to enhance productivity and competitiveness [76][78] Q&A Session Summary Question: Can you help with the bridge to 2026? - Management discussed the importance of considering full-year EBIT and the impact of cost savings and asset utilization on future earnings growth [6][8] Question: What is the status of the ARPET capacity conversion? - Management confirmed that the Kingsport plant is running well, with expectations for a 30% capacity expansion and strong customer interest in ARPET [17][19] Question: How should earnings ramp from Q4 to Q1? - Management indicated that the asset utilization headwind will turn into a tailwind, with expectations for improved demand in Q1 [22][25] Question: What is the outlook for CI earnings next year? - Management noted that while the market is currently loose, there are signs of capacity rationalization that could improve earnings in the future [42][43] Question: Are there structural supply issues in China affecting earnings? - Management clarified that while there are competitive pressures, the majority of challenges are cyclical rather than structural [48][50] Question: What is the status of the Pepsi contract? - Management explained that the restructuring of the Pepsi contract is aimed at pulling forward volume to next year, reflecting strong interest in ARPET [40][41] Question: Will the company continue its streak of annual dividend increases? - Management expressed confidence in maintaining the dividend, supported by strong cash flow [66][67]