Eastman Chemical Co. (EMN:US), the biggest U.S. producer of chemicals from coal, rose the most in more than three years after surpassing analysts’ third-quarter profit estimates and lifting its 2012 forecast.
Eastman Chemical rose 12 percent to $60.19 at the close in New York, the biggest gain since April 24, 2009.
Excluding restructuring costs and expenses related to the July acquisition (EMN:US) of Solutia Inc., profit from continuing operations rose to $1.57 a share from $1.26 a year earlier, Kingsport, Tennessee-based Eastman said yesterday in a statement. That topped the $1.42 average estimate of 13 analysts compiled by Bloomberg.
Chairman and Chief Executive Officer Jim Rogers increased sales by 25 percent in the quarter to $2.26 billion with the addition of Solutia and 3 percent higher sales volumes. Earnings benefited from lower raw-material costs, helping offset lower prices, said Edlain Rodriguez, a New York-based analyst at Lazard Capital Markets.
“Eastman continues to distinguish itself,” Rodriguez, who rates the shares buy, said in a note yesterday. “Despite the challenging global economic environment, Eastman expects its portfolio to continue demonstrating strength.”
Full-year earnings will be $5.30 to $5.40 a share, compared with a prior forecast of $5.30, Eastman said. Maintenance at an ethylene plant in Longview, Texas, will reduce fourth-quarter earnings by about 10 cents a share, Rogers said on a conference call today.
Profit in 2013 will be at least $6 a share, and a more specific forecast will be discussed at a Nov. 5 investor event, Rogers said.
Eastman plans to use cash to repay $1 billion of debt, Chief Financial Officer Curtis Espeland said on the call. The company won’t rule out acquisition opportunities, Rogers said.
“If there was something that was just exceptional we don’t have to let it go by without getting our dog in the hunt,” Rogers said on the call.
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