US Eastman boosts Q2 profit to $148m as sales jump 38%

29 July 2010 23:06  [Source: ICIS news]

HOUSTON (ICIS)--US polyester producer Eastman Chemical on Thursday reported a second-quarter net profit of $148m (€114m), more than doubling the $65m it made in the 2009 second quarter as sales increased by 38%.

Revenues were $1.72bn, up from $1.25bn in the year-earlier period. Eastman attributed the higher revenues to improved customer demand resulting from a global economic recovery as well as the company’s growth initiatives.

Following its earnings announcement, Eastman’s stock surged by $2.49, or 4.2%, to $62.25/share in after-hours electronic trading on the New York Stock Exchange.

By segment, the company said it saw a 72% sales increase to $541m in its performance chemicals and intermediates business. This resulted from strength in olefin derivative product lines as well as new plasticiser lines from the company’s acquisition of Genovique Specialties.

Elsewhere, Eastman’s coatings, adhesives, specialty polymers and inks segment saw revenues increase 37% to $416m due to higher volumes for specialty polymers and specialty coalescents lines. In particular, the coatings markets in the Asia Pacific and European regions showed strength, the company said.

In performance polymers, sales revenue increased 20% to $222m but operating earnings were nearly flat as difficult market conditions for polyethylene terephthalate (PET) in North America limited the company’s ability to raise selling prices in the wake of higher raw material costs.

Looking forward, Eastman said it expected volumes would reflect typical seasonal declines in the second half of the year and that raw material and energy costs would be less volatile.

Eastman projected earnings per share (EPS) at $1.65-$1.75 for the third quarter and between $6.20-6.40/share for the full 2010 fiscal year.

That was up from a prior full-year EPS estimate of $5.25-5.50/share given in early June.

($1 = €0.77)

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By: Ben DuBose
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