Eastman announces second-quarter 2025 financial results

KINGSPORT, Tennessee

Eastman (NYSE:EMN) has announced its second-quarter 2025 financial results.

• Continued commercial excellence by our teams keeping price-cost in specialties stable and defending market share

• Strong results in Additives & Functional Products driven by mix improvement and leverage to stable end markets and solid results in Advanced Materials despite significant challenges in key end markets

• Circular platform continues making progress, with methanolysis plant setting new production records, strong customer engagement with new business pipeline building, and developing capital-efficient options for the second facility

• We continue to navigate the economic impact of the increased level of tariffs and related uncertainty and are adjusting our global supply chain

• Increasing focus on cost reduction and cash generation as challenging global macroenvironment persists

*For non-core 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.

“The second quarter presented significant challenges, and I am proud of the way our team fought to deliver resilient earnings in our specialty businesses,” said Mark Costa, Board Chair and CEO. “As expected, the macroeconomic backdrop showed little signs of seasonal improvements across our end markets. In this context, we worked hard to mitigate tariff impacts on our global business through supply chain and commercial excellence. The second quarter also had an approximately $20 million impact in Chemical Intermediates due to an unplanned outage, compounding what continues to be tougher conditions for commodity markets. The Kingsport methanolysis facility continues to operate well, and we remain on track to produce greater than 2.5 times more recycled content than 2024. Moving forward, we will continue to focus on cash generation with a disciplined approach to managing our cost structure, reducing working capital, and allocating capital.”  

Segment Results 2Q 2025 versus 2Q 2024

Advanced Materials – Sales revenue decreased 2 percent due to lower sales volume/mix.

Lower sales volume/mix was due to ongoing weak primary demand in key end markets, including building and construction and automotive OEM production. The lower sales volume/mix was partially offset by growth in specialty plastics.

EBIT decreased primarily due to lower sales volume/mix and higher planned maintenance expense. 

Additives & Functional Products – Sales revenue increased 7 percent due to 4 percent higher selling prices, 2 percent higher sales volume/mix, and a favorable foreign currency exchange impact.

Higher selling prices were driven by cost-pass-through contracts. Higher sales volume/mix was primarily due to care chemicals serving stable end markets and heat transfer fluid project fulfillments.

EBIT increased due to higher sales volume/mix and favorable price-cost.

Fibers – Sales revenue decreased 17 percent primarily due to 16 percent lower sales volume/mix.

Lower sales volume/mix was driven by lower acetate tow volume due to customer inventory destocking and industry capacity share adjustments and lower textiles sales into China due to the global trade dispute. 

EBIT declined primarily due to lower sales volume/mix.

Chemical Intermediates – Sales revenue decreased 10 percent due to 5 percent lower sales volume/mix partially due to an unplanned outage and 5 percent lower selling prices due to unfavorable commodity market fundamentals. 

EBIT decreased due to lower spreads, an unplanned outage including less volume to sell, and increased planned maintenance costs. The total impact of the unplanned outage reduced EBIT by approximately $20 million. Spreads declined due to a combination of lower prices and higher raw material and energy costs.

Cash Flow

In second-quarter 2025, cash provided by operating activities was $233 million compared to $367 million in second-quarter 2024. The company returned $145 million to stockholders through dividends and share repurchases. See Table 5. Priorities for uses of available cash include capital expenditures, payment of the quarterly dividend, net debt reduction, and share repurchases.

2025 Outlook

Commenting on the outlook for full-year 2025, Costa said: “As we have entered the second half of the year, we are encountering a global macroeconomic environment that remains challenging. Customer caution is intensifying due to a changing tariff landscape and weak underlying demand. With this, we are taking decisive actions to control costs, manage working capital, and drive our circular economy platform forward in a disciplined manner. Considering the wide range of potential outcomes due to increased tariff levels and related uncertainty, the company is maintaining its approach of providing quarterly adjusted earnings per share guidance. We are expecting a decline in volume due to trade dispute impacts and normal seasonality. In this context, we are increasing our focus on generating cash. We are executing plans to reduce inventory by greater than $200 million below current levels. This reduction of inventory will come with a $75 million to $100 million asset utilization headwind to earnings in the back half of the year, with around $50 million in the third quarter. Partially offsetting these headwinds is an expected increase in Chemical Intermediates earnings after an unplanned outage in the second quarter. We also expect to benefit from the continued ramp-up of our cost-reduction initiatives and increased revenue from our Kingsport methanolysis facility. When putting these factors together, we project third-quarter adjusted earnings per share to be around $1.25. We expect to generate full-year operating cash flow of ~$1 billion as declines in cash earnings will be partially offset by a release of working capital. We are in a solid financial position in an industry that is going on four years of significant challenges. The actions we are taking today are expected to position the company to be a strong relative performer, now and in the coming years.” 

The third-quarter 2025 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. 

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 (Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements are all statements, other than statements of historical fact, that may be made by Eastman Chemical Company from time to time. In some cases, you can identify forward-looking statements by terminology such as "anticipates", "believes", "estimates", "expects", "intends", "may", "plans", "projects", "forecasts", "will", "would", "could", and similar expressions, or expressions of the negative of these terms. Forward-looking statements may relate to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, supply and demand, volume, price, cost, margin and sales; growth opportunities; dividends, share repurchases or other financial items, 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 and the assumptions underlying them are subject to a number of risks and uncertainties, and actual performance or results could differ materially from expectations expressed in any forward-looking statements if one or more of the underlying assumptions and/or expectations prove to be inaccurate or is unrealized. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by the federal securities laws. 

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, 2024, 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. Any adjustments described above that are zero for a given period are excluded from the reconciliation tables presented in this release. 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 August 1, 2025, 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 July 31, 2025. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 243966. 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, August 1, 2025, through 11:59 p.m. Eastern Time, August 11, 2025, Toll Free at +1 (866) 813-9403, passcode 957945.

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