Eastman Chemical Company's first-quarter revenue increased 13% year-over-year and 19% excluding the impact of the divested rubber additives and adhesive resins product lines. Total sales in Q1 stood at $2,714 versus $2,409 during same quarter last year. However the adjusted earnings per diluted share fell to $2.06 versus $2.13 last year.

 

Company made significant progress raising selling prices by 17% on a combined basis in Additives & Functional Products and Advanced Materials to recover spreads and offset broad-based inflation.

 

"First-quarter results reflected outstanding underlying performance, including strong pricing to offset significant inflation of raw material, energy, and distribution costs, the benefit of our innovation-driven growth model, and continued solid end-market demand," said Mark Costa, Board Chair and CEO. "This strong performance included the impact of the steam line incident at our Kingsport, Tennessee, manufacturing facility, which occurred in the first quarter and primarily impacted specialty copolyesters. We remain thankful that there were no serious injuries related to this incident and are appreciative to the Eastman team for the quick response to the situation. Going forward, we remain focused on delivering strong revenue, earnings, and cash flow for the remainder of this year and the coming years. We are also continuing to make great progress on our circular initiatives, which are expected to be a meaningful contributor to our growth."

 

Commenting on the outlook for full-year 2022, Costa said: "We delivered outstanding underlying performance in the first quarter despite a challenging global economic environment and the Kingsport steam line incident. This performance reflects strong pricing to recover spread and offset significant inflation, the benefit of our innovation-driven growth model, and continued solid end-market demand. First-quarter adjusted results also included an estimated $125 million financial impact of the Kingsport steam line incident. Moving forward, we expect the strong underlying performance from the first quarter to continue for the remainder of the year. We remain on track with our spread tailwind for the year with continued pricing excellence as we recover spread from the back half of 2021 and offset current inflation in 2022. We also expect our specialty product lines to continue to grow faster than our end markets and drive additional mix improvement. In addition, we expect to recover a significant portion of the financial impact related to the Kingsport steam line incident through higher volume. These strong tailwinds are expected to more than offset a number of headwinds, including persistent logistics constraints, a slowly recovering global auto market, and limited impact so far from both the spread of COVID-19 in China and a slowing European economy. Taking all of this together, we continue to expect 2022 adjusted EPS to be between $9.50 and $10.00, which at the midpoint would be 10 percent growth year over year. We also expect operating cash flow to approach $1.6 billion."

 

The full-year 2022 projected adjusted diluted EPS excludes any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS without unreasonable efforts. For the same reasons, we are unable to address the significance of the available information, which could be material to future results.