Eastman Announces First-Quarter 2026 Financial Results
KINGSPORT, Tenn.–(BUSINESS WIRE)–
Eastman Chemical Company (NYSE:EMN) announced its first-quarter 2026 financial results.
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- Delivered strong sequential sales volume/mix improvement of >10 percent in specialty businesses
- Implementing ~$500 million of price increases across the portfolio to offset substantial raw material and distribution inflation
- Leveraging our integrated U.S.-based assets and global reach to be a reliable supplier to our customers amid a dynamic global environment
- On track with methanolysis facility revenue acceleration and ~$30 million of incremental earnings
- Drove 240 basis points of sequential adjusted EBIT margin improvement through improved sales volumes and disciplined price-cost management
- Maintained strong momentum towards key financial priorities, including year-over-year earnings growth, our $125 million to $150 million of cost savings, and our cash flow targets
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(In millions, except per share amounts; unaudited) |
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1Q26 |
1Q25 |
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Sales revenue |
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$2,177 |
$2,290 |
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Earnings before interest and taxes (“EBIT”) |
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188 |
302 |
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Adjusted EBIT* |
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200 |
311 |
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Earnings per diluted share |
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0.93 |
1.57 |
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Adjusted earnings per diluted share* |
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1.09 |
1.91 |
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Net cash used in operating activities |
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(137) |
(167) |
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*For non-core and unusual items excluded from adjusted earnings and for adjusted provision for income taxes, segment adjusted EBIT margins, and net debt, reconciliations to reported company and segment earnings and total borrowings for all periods presented in this release, see Tables 3A, 3B, 4A, and 6. |
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“We delivered a solid first quarter that was in line with our expectations for both earnings and cash flow,” said Mark Costa, Board Chair and CEO. “I am proud of the way we took immediate steps to position our company to create opportunities and navigate yet another significant disruption in our industry. As global markets reacted to the conflict in the Middle East, the Eastman team quickly took decisive actions to secure supply for crucial raw materials, adjust prices where necessary, and partner with our customers to help them navigate this uncertainty. Sales volume/mix increased 10 percent sequentially as demand improved due to normal seasonality and reduced caution from customers after year-end inventory management. Altogether, volumes built momentum through the end of the quarter and continue to be strong. We also made solid progress in the commercial ramp up of the Kingsport methanolysis facility and remain on track for our operational and financial goals.”
Corporate Results 1Q 2026 versus 1Q 2025
Sales revenue decreased 5 percent as 4 percent lower sales volume/mix and 4 percent lower selling prices were offset by a 3 percent favorable foreign currency exchange impact.
Lower sales volume/mix was primarily driven by customer inventory destocking in the acetate tow product line as well as continued weak underlying demand for consumer discretionary end markets. Lower selling prices were due to lower raw material prices and continued weak commodity market conditions in Chemical Intermediates.
EBIT decreased due to lower spreads in Chemical Intermediates, lower sales volume/mix in Fibers, lower asset utilization in Advanced Materials, and increased energy costs across our businesses resulting from Winter Storm Fern. These factors were partially offset by the benefits of continued cost-reduction initiatives and recognition of an expected refund for tariffs paid under the International Emergency Economic Powers Act.
Segment Results 1Q 2026 versus 1Q 2025
Advanced Materials – Sales revenue decreased 1 percent due to 4 percent lower selling prices partially offset by a 3 percent favorable foreign currency exchange impact.
Selling prices declined due to lower raw material prices. Sales volume/mix was unchanged as strong growth in specialty plastics was offset by weakness in performance films due to a soft automotive aftermarket.
EBIT decreased primarily due to substantially lower asset utilization driven by differences in building inventory last year and reducing inventory this year. Price-cost was also modestly lower. These factors were partially offset by continued cost-reduction initiatives.
Additives & Functional Products – Sales revenue increased by 1 percent due to a 4 percent favorable foreign currency exchange impact, partially offset by 2 percent lower selling prices and 1 percent lower sales volume/mix.
Lower selling prices were primarily driven by cost-pass-through contracts. Lower sales volume/mix was primarily due to lower demand for coatings additives in the building and construction end market and a few discontinued products, partially offset by growth in pharma and aviation.
EBIT was relatively unchanged due to a favorable foreign currency exchange impact, mostly offset by modest price declines.
Fibers – Sales revenue decreased by 22 percent due to 19 percent lower sales volume/mix and 3 percent lower selling prices.
Lower sales volume/mix was driven by continued customer inventory destocking in acetate tow and the impact of the conflict in the Middle East, resulting in some reduced customer shipments. Textiles sales volume/mix was also lower due to continued weakness in the underlying end market. Lower selling prices were due to modestly lower contract pricing compared to 2025.
EBIT declined due to substantially lower sales volume/mix, lower price-cost due to modestly lower selling prices and higher energy costs, and lower asset utilization.
Chemical Intermediates – Sales revenue decreased by 9 percent due to 7 percent lower selling prices and 3 percent lower sales volume/mix, partially offset by a 1 percent favorable foreign currency exchange impact.
In January and February, lower selling prices and lower sales volume/mix were driven by continued weak commodity market conditions compared to the prior-year period. In March, the Middle East conflict began to tighten market conditions for some olefin and derivative products.
EBIT decreased due to lower spreads, partially offset by continued cost reduction initiatives.
Cash Flow
In first quarter 2026, cash used in operating activities was $137 million versus $167 million in first quarter 2025. Inventory increased to prepare for large, planned shutdowns in second quarter 2026. The company returned $96 million to stockholders through dividends. See Table 5. Priorities for uses of available cash for 2026 include payment of the quarterly dividend, capital expenditures, and share repurchases while maintaining our solid investment-grade balance sheet.
2026 Outlook
Commenting on the outlook for full-year 2026, Costa said: “The Middle East conflict is a significant disruption for our industry, which is likely to create net upside to our earnings. Compared to January, the most visible change is in Chemical Intermediates, where tightening market conditions are quickly and substantially improving margins. In our specialty businesses, we are raising prices to offset higher raw material and distribution costs and offset those costs as we go through the year. We also see potential volume/mix upsides where our U.S. asset footprint enables security of supply for our customers. Of course, we don’t know how long this conflict will last and what impact it might have on consumer demand. For now, we are planning for stable demand compared to 2025 in our consumer discretionary end markets, except for automotive, which we expect will decline by low-single-digits. In this context, we continue to focus on what we can control and actions that we can take to consistently serve the market with our advantaged North American assets. We expect meaningful growth from our innovation-driven growth model, led by new wins in our Renew product lines produced at our Kingsport methanolysis facility. We remain on track to reduce costs by between $125 million and $150 million, net of inflation, and are maintaining disciplined capital expenditures by spending approximately $400 million this year. We also continue to expect tailwinds from lower shutdown expense, improved asset utilization, and favorable foreign currency exchange rates. When putting all of these factors together, we remain confident we can significantly improve earnings in 2026 versus 2025. On cash, the inflationary environment is putting pressure on working capital. We see a pathway for operating cash flow to approach 2025 levels while recognizing that this pathway is narrowing in the current environment.
“Looking specifically at the sequential second-quarter outlook, we expect tailwinds from improved sales volume/mix in Advanced Materials and, to a lesser extent, Additives & Functional Products, as well as substantial spread improvement in Chemical Intermediates. We expect specialty price increases to keep pace with higher raw material and distribution costs through the quarter. Headwinds include approximately $45 million of costs from planned maintenance. When putting these factors together, we project second-quarter adjusted EPS to be in the range of $1.70 to $1.90.”
The second-quarter 2026 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 post-retirement 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.
Forward-Looking Statements
The information in this release and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, sales, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, supply and demand, capacity and utilization, growth opportunities, statements of management’s plans, strategies and objectives for future operations, and statements regarding future economic, industry or market conditions or performance. Such projections and estimates are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and as updated in the company’s filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov and the company’s website at www.eastman.com.
Financial Measures (Non-GAAP)
In addition to the financial information presented in accordance with Generally Accepted Accounting Principles (“GAAP”), this press release includes the following non-GAAP financial measures: adjusted EBIT, adjusted EBIT margin, and adjusted earnings per diluted share. We define adjusted EBIT as the GAAP measure EBIT adjusted for non-core, unusual, or non-recurring items. Adjusted earnings per diluted share is defined as the GAAP measure earnings per diluted share adjusted for non-core, unusual, or non-recurring items. Adjusted EBIT margin is defined as adjusted EBIT divided by the GAAP measure sales revenue in the Company’s Unaudited Consolidated Statement of Earnings, Comprehensive Income and Retained Earnings for the same periods. See the reconciliation tables presented in this release for a detailed reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.
We believe that in addition to our results determined in accordance with GAAP, these non-GAAP financial measures provide useful information to both management and investors in measuring our financial performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP measures. These non-GAAP financial measures provide supplemental information regarding our operating performance that excludes certain gains, losses and non-cash charges that occur relatively infrequently and/or that we consider to be unrelated to our core operations. Non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Other companies in our industry may calculate these measures differently, which may limit their usefulness as comparative measures.
Conference Call and Webcast Information
Eastman will host a conference call with industry analysts on May 1, 2026, at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides and prepared remarks, go to investors.eastman.com, Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available at investors.eastman.com at approximately 4:15 p.m. ET on April 30, 2026. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 402297. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available at investors.eastman.com, Events & Presentations. A telephone replay will be available continuously beginning at approximately 1:00 p.m. Eastern Time, May 1, 2026, through 11:59 p.m. Eastern Time, May 10, 2026, Toll Free at +1 (866) 813-9403, passcode 531385.
Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive company, Eastman employs approximately 13,000 people around the world and serves customers in more than 100 countries. The company had 2025 revenue of approximately $8.8 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260430144241/en/
Media: Tracy Kilgore Addington
423-224-0498 / [email protected]
Investors: Greg Riddle
212-835-1620 / [email protected]
KEYWORDS: Tennessee United States North America
INDUSTRY KEYWORDS: Packaging Chemicals/Plastics Manufacturing
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