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

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]