The operational incident in its Kingsport site’s coal gasification operations area to impact the company’s operating earnings
Eastman Chemical Company updated its full-year 2017 earnings expectations, taking into consideration the impact of an operational incident at its Kingsport manufacturing facility and recent hurricanes. There was an operational incident in the company's Kingsport site’s coal gasification operations area on October 4, 2017. Although, there were no serious injuries and no impact on the environment, coal gasification operations were hit by the incident.
The company expects that its earnings in 2017 will tend toward the high end of the previously projected range of 10 to 12 % adjusted EPS growth for the year as compared with 2016. This expectation excludes the financial impact of the Kingsport operational incident, and is based on facts that underlying business conditions in the third quarter of this year were strong across the company and are expected to continue into the fourth quarter. Besides, the financial impact of recent hurricanes in the U.S. is expected to be neutral.
All areas of the manufacturing facility are returning to normal operations except coal gasification operations. The company is putting alternate processes in place to maintain operations of all downstream derivative facilities of coal gasification as repairs are being made. While the company continues to assess the financial impact of the incident including the applicability of property and business interruption insurance, the incident is preliminarily expected to impact operating earnings by between $50 and $100 million, mostly in fourth quarter 2017.
“The Eastman team responded decisively and with great professionalism to both the operational incident and the recent hurricanes,” said Mark Costa, Board Chair and CEO.