Thursday Eastman Chemical Co. (EMN), said its fourth quarter loss widened from last year, due to higher non-cash asset impairments and restructuring charges and a decline in revenue. Nevertheless, the Eastman's quarterly earnings, as well as revenues breezed past Street expectations. Looking ahead, the company said it expects first quarter earnings to be slightly above its fourth quarter performance.
The Kingsport, Tennessee-based company reported a net loss for the fourth quarter of $32 million or $0.44 per share, compared to a loss of $2 million or $0.03 per share for the fourth quarter 2008.
Included in results for fourth quarter 2009 were non-cash asset impairments and restructuring charges, net, of $177 million, primarily for the discontinued Beaumont, Texas, industrial gasification project. Fourth-quarter 2008 results included asset impairments and restructuring charges, net, of $24 million, accelerated depreciation costs of $1 million, and other operating income of $16 million.
Excluding the items net income for the fourth quarter was $84 million or $1.14 per share, compared to $4 million or $0.05 per share in the year-ago quarter.
On average, eight analysts polled by Thomson Reuters expected the company to earn $1.00 per share for the quarter. Analysts estimates typically exclude special items.
Sales revenue for the quarter decreased 1% to $1.33 billion from $1.35 billion in the prior-year quarter. Four analysts had a revenue consensus of $1.26 billion for the fourth quarter.
Fourth-quarter 2009 and 2008 sales revenue included contract ethylene sales, and fourth-quarter 2008 sales revenue also included contract polymer intermediates sales. Excluding such sales, revenue increased 2% as sales volume increased 12% and selling prices declined 10%.
The higher sales volume was due to improved demand compared to the depressed level in fourth quarter 2008 while selling prices declined due to the global recession.
In the immediately preceding quarter, Eastman Chemical posted a profit that rose slightly from last year, as lower raw material and energy costs combined with cost-cutting measures offset a 26% drop in sales. Net income for the third quarter was $101 million or $1.38 per share on revenues of $1.34 billion.
Fourth quarter sales from the company's Coatings, Adhesives, Specialty Polymers and Inks segment increased 5% year-over-year to $327 million, as higher sales volume more than offset lower selling prices.
Sales from the Fibers segment declined 4% to $253 million, as an unfavorable shift in product mix and lower sales volume were partially offset by higher selling prices.
Fourth quarter sales from the company's Performance Chemicals and Intermediates dropped 1% to $387 million from last year. Excluding contract ethylene sales increased by 5%, due primarily to higher sales volume, partially offset by lower selling prices.
Performance Polymers segment sales slumped 17% to $156 million, excluding contract polymer intermediates sales to divested manufacturing facilities in fourth quarter 2008 declined 7%, due to lower selling prices.
Sales from the company's Specialty Plastics segment rose 6% to $205 million due to higher sales volume that more than offset lower selling prices.
For the fiscal year 2009, the company reported net income of $136 million or $1.88 per share, compared to $346 million or $4.59 per share in the same period last year.
Excluding items, earnings for the fiscal year was $3.63 per share, compared to $4.50 per share in the prior year period.
Sales for 2009 fell 25% to $5.04 billion from $6.73 billion in the corresponding year-ago period.
Analysts were looking for earning of $3.49 per share on revenues of $4.98 billion for fiscal year 2009.
Looking forward, the company said it expects first quarter 2010 earnings per share to be slightly higher than fourth quarter 2009 earnings per share of $1.14. The company also said it expects to deliver 20% higher earnings per share in 2010 compared with 2009.
Eastman Chemical shares closed Thursday's regular trading session at $56.98, down $1.08 or 1.86%, on a volume of 0.85 million shares. However, the stock gained $1.39 or 2.44% in after hours trading.
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