Eastman Chemical Company has reported weaker earnings for 2025 amid prolonged softness across chemical and consumer discretionary markets. 

 

However nearly $1 billion in operating cash flow underscored the company’s financial resilience as it extended its dividend growth streak to 16 consecutive years.

 

The specialty materials maker said fourth-quarter sales fell 12% year over year to $1.97 billion, while full-year revenue declined 7% to $8.75 billion. Earnings before interest and taxes dropped sharply as lower volumes, weaker pricing, and competitive pressure—particularly in Chemical Intermediates—continued to weigh on results.

 

Despite the downturn, Eastman exceeded its internal cost-reduction targets, generating approximately $100 million in savings in 2025, well above its original goal of more than $75 million. The company also returned about $500 million to shareholders through dividends and share repurchases.

 

“Despite a challenging operating environment for the chemical industry and continued weakness in consumer discretionary end markets, our team delivered a year that demonstrates the strength of our portfolio’s ability to generate cash,” said Mark Costa, board chair and CEO. 

 

“In 2025, we generated operating cash flow approaching $1 billion, a clear validation of our disciplined approach to cost and working capital management.”

 

Eastman’s Kingsport methanolysis facility emerged as a bright spot, achieving operational targets and delivering approximately $60 million of incremental earnings compared with 2024. Production of recycled content more than doubled year over year, supporting both earnings and sustainability goals.

 

“Our commercial teams showed excellence in defending the value of our products, and we accelerated our structural cost reductions throughout the year to protect margins and preserve competitiveness,” Costa said. “We continued to prioritize stockholder returns and raised the dividend for the 16th consecutive year.”

 

All four operating segments reported year-over-year revenue declines in the fourth quarter, led by a 27% drop in Fibers as acetate tow customers continued to destock inventories and textile demand weakened under tariff pressure. Chemical Intermediates also struggled, with revenue down 17% on lower volumes and pricing amid intensified competition from Asia.

 

For the full year, Advanced Materials and Fibers recorded the steepest declines, while Additives & Functional Products posted modest price-driven growth that was offset by lower volumes in construction and automotive refinish markets.

 

Looking ahead, Eastman said it is expanding its self-help measures to offset continued macroeconomic uncertainty. The company plans to increase cost-reduction actions to a range of $125 million to $150 million in 2026 and expects improved manufacturing utilization, currency tailwinds, and further benefits from innovation initiatives.

 

“We entered 2026 with momentum on key initiatives to improve our financial results compared to 2025,” Costa said. “When putting these factors together, we are confident we can meaningfully improve earnings compared to 2025.”

 

For the first quarter of 2026, Eastman forecast adjusted earnings per share between $1.00 and $1.20, citing seasonal volume improvements, lower shutdown costs, and continued cost actions, partially offset by higher energy costs and modest price pressure in Fibers and Chemical Intermediates.