Eastman Chemical Company announced its third-quarter 2024 financial results. The company posted a strong year-over-year sales volume/mix growth with improvement in all operating segments.

During Q3 FY24, sales revenue increased 9 percent primarily due to 8 percent higher sales volume/mix. Higher sales volume/mix across all segments was driven by the end of customer inventory destocking across most key end markets and innovation driving growth above underlying market trends.

EBIT increased primarily due to higher sales volume/mix, higher spreads in Chemical Intermediates, and improved asset utilization. This was partially offset by higher variable compensation and by operating costs for the Kingsport methanolysis facility.

Adjusted EBIT margin increased 360 basis points compared to last year through volume/mix growth, operating leverage, and commercial excellence

Our third-quarter results were driven by strong sales volume/mix growth, operating leverage, and continued commercial excellence,” said Mark Costa, Board Chair and CEO.

“Underlying end-market trends remained largely unchanged from the second quarter, consistent with our expectations. In many of our specialty product lines, we continue to grow above underlying end markets, including automotive. During this prolonged period of muted demand, I am proud of the way the Eastman team has worked to find ways to deliver on our earnings and cash commitments this year. In the circular economy, I am excited to announce that we have made an investment decision and will be moving forward with the construction of a second methanolysis facility in Longview, Texas. We continue to make good progress on ramping up our Kingsport methanolysis facility, although we had more downtime than expected.”

2024 Outlook

Commenting on the outlook for full-year 2024, Costa said, “We are proud to have delivered another strong quarter in this period of prolonged macroeconomic weakness. As expected, sales volume improved from last year mostly due to the lack of customer inventory destocking. With destocking over, our demand has reconnected to our end markets, which remain stable. In the fourth quarter, we expect to see normal seasonal volume declines across most of our markets. We also expect to continue to leverage our innovation-driven growth model to drive growth above our markets. We expect to benefit from commercial excellence and the continued flow through of lower raw material and energy costs in our specialty businesses. While we have made significant progress achieving consistent production rates at the Kingsport methanolysis facility, it has taken us longer than expected to achieve those rates. Despite these challenges, the strong results we have delivered in our base business enable us to keep the midpoint of our full-year adjusted EPS guidance unchanged. Taking these factors together, we expect 2024 EPS to be between $7.50 and $7.70 and for 2024 cash from operations to approach $1.3 billion, reflecting a targeted increase in working capital to support growth in 2025. I remain confident in our ability to deliver earnings growth and strong cash flow going forward.”