Core Insights - Eastman Chemical Company (EMN) reported second-quarter 2025 earnings of $1.20 per share, a decline of approximately 38% from $1.94 in the same quarter last year [1] - Adjusted earnings were $1.60 per share, down from $2.15 year-over-year, and below the Zacks Consensus Estimate of $1.72 [1][9] - Revenues for the second quarter were $2,287 million, a decrease of around 3% year-over-year, missing the Zacks Consensus Estimate of $2,289.9 million [1][9] Financial Performance - Cash and cash equivalents at the end of the quarter stood at $423 million, with net debt at $4,703 million [6] - Cash provided by operating activities was $233 million, down approximately 37% year-over-year [6] - The company returned $145 million to shareholders through dividends and share repurchases during the quarter [6] Segment Performance - Advanced Materials segment sales fell 2% year-over-year to $777 million, beating the estimate of $770 million [3] - Additives & Functional Products segment sales increased by 7% year-over-year to $769 million, surpassing the estimate of $732 million [4] - Chemical Intermediaries segment sales decreased by 10% year-over-year to $463 million, missing the estimate of $529 million [5] - Fibers segment reported sales of $274 million, down 17% year-over-year, but beating the estimate of $252 million [5] Market Outlook - The company is facing significant challenges in the second quarter, with only modest signs of seasonal improvement across end markets [2] - EMN anticipates a challenging global macroeconomic environment in the second half, with cautious customer behavior due to changing tariffs and soft demand [7] - The company expects third-quarter adjusted earnings to be approximately $1.25 per share and aims for an operating cash flow of around $1 billion for the full year [7][9] Stock Performance - EMN's shares have declined by 25.5% over the past year, compared to a 22.8% decline in the Zacks Chemicals Diversified industry [10]

Core Viewpoint - United Parcel Service (UPS) and FedEx (FDX) dominate the air freight and cargo industry, with market capitalizations of $93.3 billion and $58 billion respectively, but both companies are facing significant challenges in terms of revenue growth and operational efficiency [1]. UPS Summary - UPS has been experiencing revenue weakness due to geopolitical uncertainty and high inflation, impacting consumer sentiment and growth expectations [2]. - The company expects average daily volumes to decrease by 8.5% in 2025 compared to 2024, with projected revenues of $89 billion, significantly below the Zacks Consensus Estimate of $94.6 billion [3]. - UPS anticipates reducing volumes with its largest customer, Amazon.com, by over 50% by June 2026, and further cuts in guidance may occur due to tariff-related tensions [3]. - In February 2024, UPS announced a 0.6% increase in its quarterly dividend to $1.64 per share, raising concerns about the sustainability of its elevated dividend payout ratio of 84% [4]. - Free cash flow has declined from a high of $9 billion in 2022, with expectations of generating $5.7 billion in 2025, barely covering projected dividend payments of $5.5 billion [5][6]. - UPS is expanding its network through acquisitions, including Estafeta in Mexico and a deal with Ninja Van Malaysia, to capitalize on cross-border opportunities [7]. - At the end of 2024, UPS had cash and cash equivalents of $6.3 billion against long-term debt of $19.4 billion, resulting in a debt-to-capital ratio of 0.54, slightly above the industry average [8]. FedEx Summary - FedEx is implementing a companywide cost realignment initiative called DRIVE, expected to yield savings of $2.2 billion in fiscal 2025 after $1.8 billion in fiscal 2024 [9]. - The company raised its quarterly dividend by 10% to $1.38 per share in June 2024 and is also active in share buybacks [10]. - FedEx has lowered its adjusted earnings guidance for fiscal 2025 to a range of $18-18.6 per share, with revenues expected to be flat or slightly down year over year [11]. - Despite challenges, FedEx has a strong brand and network, which are expected to generate steady cash flows in the long run [12]. - At the end of the third quarter of fiscal 2025, FedEx had cash and cash equivalents of $5.1 billion against long-term debt of $19.5 billion, resulting in a debt-to-capital ratio of 0.43, indicating a stronger equity position compared to UPS [13]. Price Performance and Valuation - Over the past year, UPS shares have declined by 26.6%, underperforming the industry, while FedEx shares have decreased by 11.1%, outperforming its industry [14]. - UPS is trading at a forward sales multiple of 1.06X, above the industry average of 1X, while FedEx's forward sales multiple is at 0.65X [16]. - The Zacks Consensus Estimate for UPS indicates a 3% year-over-year decline in 2025 sales, while FedEx's estimate suggests flat sales with a 3.3% growth in earnings [19][21]. - FedEx appears more attractive than UPS from a valuation standpoint, with projected earnings growth of 11.5% over the next five years compared to UPS's 9.3% [23].