KINGSPORT, Tennessee

Eastman Chemical Company (NYSE:EMN) announced its first-quarter 2023 financial results.

  • Strong sequential improvement in earnings driven by disciplined pricing, lower costs, and efficient operations.
  • Demonstrated commercial excellence by holding prices stable to fourth quarter despite weak demand and continued customer inventory destocking.
  • Continued progression on circular economy platform, building an exciting new vector of growth for the company.
  • On track to reduce cost structure by more than $200 million, net of inflation.
  • Functional amines, a stable growth and high-margin business, integrated into Additives & Functional Products. See “Functional Amines” section of this release and tables for more information.

(In millions, except per share amounts) 1Q23 1Q22
Sales revenue $2,412
Earnings before interest and taxes ("EBIT") 246 333

Adjusted EBIT*






Earnings per diluted share 1.12

Adjusted earnings per diluted share*


1.63 2.06
Net cash provided by operating activities (2) 17

*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, 4B, and 6.

“Our first-quarter results showed solid improvement from fourth quarter, reflecting continued commercial excellence in pricing and the benefit of lower raw material and energy costs,” said Mark Costa, Board Chair and CEO. “We delivered this performance despite a global economic environment that remains challenging due to above normal customer inventory destocking, lackluster demand particularly in consumer durables and building and construction end markets, and an unfavorable impact from foreign currency exchange rates. In this environment, we are controlling what we can control, including price discipline, reducing costs, and remaining disciplined on capital allocation. We remain confident in the resiliency of our portfolio and the sustainability of our strong cash flow going forward. We are also excited about progress we are making on our circular economy initiatives, with significant milestones for the platform expected to be achieved throughout the year.”  

Corporate Results 1Q 2023 versus 1Q 2022

Sales revenue decreased 11 percent due to 9 percent lower sales volume/mix, a 6 percent unfavorable impact from a divested business, and a 2 percent unfavorable impact from foreign currency, partially offset by 6 percent higher selling prices.

Sales volume/mix was lower across most product lines due to the continuation of weak primary demand and continued customer inventory destocking across several end markets, including consumer durables, building and construction, personal care, and water treatment. This weakness was partially offset by growth in automotive, particularly for advanced interlayers and performance films. Higher selling prices, primarily in Fibers and Advanced Materials, reflect the solid price gains made in 2022 to recover significantly higher raw material, energy, and distribution costs.

EBIT decreased due to lower sales volume/mix, increased pension expense, an unfavorable impact from foreign currency, and continued investment in growth. These factors were partially offset by increased selling prices more than offsetting higher variable costs and lower manufacturing costs.

Segment Results 1Q 2023 versus 1Q 2022

Advanced Materials – Sales revenue was relatively unchanged as 10 percent higher selling prices were mostly offset by 6 percent lower sales volume/mix and a 3 percent unfavorable impact from foreign currency.

Higher selling prices, particularly for advanced interlayers and specialty plastics, were a result of significant levels of inflation in 2022. Lower sales volume/mix in specialty plastics was due to continued weak demand and aggressive customer inventory destocking, particularly in the consumer durables and consumables end markets. The lower sales volume/mix in specialty plastics was partially offset by improved automotive demand and product mix in films driven by increased sales of premium products, including paint protection film and premium interlayers for electric vehicles.

EBIT increased due to lower manufacturing costs and higher selling prices more than offsetting higher variable costs. These factors are partially offset by an unfavorable impact from foreign currency and lower sales volume/mix.

Additives & Functional Products – Sales revenue decreased 13 percent due to 15 percent lower sales volume/mix, partially offset by 4 percent higher selling prices.

Sales volume/mix was lower across the segment due to weak demand and customer inventory destocking in the building and construction, water treatment, and personal care end markets. Higher selling prices were led by functional amines and care additives due to significant levels of inflation in 2022.

EBIT decreased due to lower sales volume/mix, with higher selling prices offsetting higher variable costs and modestly lower manufacturing costs.

Fibers – Sales revenue increased 42 percent primarily due to increased selling prices.

Substantially higher selling prices for acetate tow were due to an increase in industry capacity utilization and higher raw material, energy, and distribution prices throughout 2022.

EBIT increased due to recovery of margins as higher selling prices returned adjusted EBIT margins to acceptable performance levels.

Chemical Intermediates – Sales revenue decreased 18 percent primarily due to 12 percent lower sales volume/mix and 5 percent lower selling prices.

Sales volume/mix was lower in plasticizers and olefins due to continued weak end-market demand, including for building and construction, consumer durables, and industrial. Selling prices were lower due to lower raw material prices.

EBIT decreased due to lower sales volume/mix and lower spreads, which were above mid-cycle levels in the year-ago period.

Cash Flow

In first-quarter 2023, cash used in operating activities was $2 million, compared to cash provided by operating activities of $17 million in first-quarter 2022. In first-quarter 2023, the company returned $94 million to stockholders through dividends. See Table 5. Priorities for uses of available cash for 2023 include organic growth investments, payment of the quarterly dividend, bolt-on acquisitions, and share repurchases to offset dilution.

2023 Outlook

Commenting on the outlook for full-year 2023, Costa said: “We delivered solid results in the first quarter despite a difficult global economic environment. We started the year by demonstrating strong commercial excellence with our pricing discipline, which we expect will continue through the year, allowing us to substantially recover our margins as we realize lower raw material, energy, and distribution costs. In addition, we are on track to reduce manufacturing, supply chain, and non-manufacturing costs by a total of $200 million for the year, net of inflation. We also delivered strong first-quarter results in Fibers and remain well positioned for significant full-year earnings improvement in this segment as margins recover to more sustainable levels. On volume/mix, we expect to continue to leverage our innovation-driven growth model to drive growth above our end markets, especially in the back half of the year. However, demand in many of our end markets is challenged, including consumer durables and building and construction, where we see inventory destocking continuing in second quarter. Taking all of this together, we continue to expect to grow adjusted 2023 EPS between 5 and 15 percent, excluding an approximately $0.75 pension headwind. We also remain focused on taking a range of actions to deliver $1.4 billion of operating cash flow in 2023.”

The full-year 2023 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 postretirement 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.

Functional amines business now integrated into Additives & Functional Products

Starting in first-quarter 2023, Eastman integrated the functional amines business into Additives & Functional Products. In addition, organic acid products and some olefin-based products previously reported in AFP are now being managed under the CI segment. First-quarter 2023 financial reporting is on this new basis. A quarterly recast back to 2019 of the AFP and CI revenue and adjusted EBIT reflecting these product moves is provided as an appendix of this release. We expect the integration of functional amines into AFP to further enable long-term growth, result in asset and commercial synergies, and allow for increased portfolio transparency for investors.

Forward-Looking Statements

This news release includes forward-looking statements concerning current expectations and assumptions for future global economic conditions; logistics challenges, supply chain issues for customers and suppliers, and raw material and energy costs; competitive position and acceptance of specialty products in key markets; mix of products sold; cost reductions; and revenue, earnings, adjusted diluted EPS, cash flow, share repurchases, and cash and cash equivalents for full-year 2023. Such expectations and assumptions are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from expectations and assumptions expressed in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from such expectations are and will be detailed in the company’s filings with the Securities and Exchange Commission, including the Form 10-K filed for 2022, and the Form 10-Q to be filed for first-quarter 2023, both of which are or will be available, on the Eastman web site at in the Investors, SEC filings section. These statements are based on our current beliefs and expectations and speak only as of the date of this release. We do not undertake any obligation to publicly update any forward-looking statements.

Conference Call and Webcast Information

Eastman will host a conference call with industry analysts on April 28, 2023, 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, Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available at at approximately 5:00 p.m. ET on April 27, 2023. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 749251. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available at, Events & Presentations. A telephone replay will be available continuously from approximately 1:00 p.m. ET, April 28, 2023, to 11:59 p.m. ET, May 8, 2023, at +1 (866) 813-9403, passcode 986590.

About Eastman

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 and diverse company, Eastman employs approximately 14,500 people around the world and serves customers in more than 100 countries. The company had 2022 revenue of approximately $10.6 billion and is headquartered in Kingsport, Tennessee, USA.

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Greg Riddle