Eastman Fibers sales revenue up by 9%
Eastman Chemical Company announced earnings from continuing operations of $1.48 per diluted share for second quarter 2008 versus $1.19 per diluted share for second quarter 2007. Excluding the items described in the following paragraph, second-quarter 2008 earnings from continuing operations were $1.53 per diluted share, while second-quarter 2007 earnings from continuing operations were $1.32 per diluted share.
Included in the results for second quarter 2008 were accelerated depreciation costs of $3 million and asset impairments and restructuring charges of $3 million. Second-quarter 2007 results included accelerated depreciation costs of $14 million and asset impairments and restructuring charges of $2 million.
"Given the sharp increase in raw material and energy costs during the quarter and the continuing global economic uncertainty, our year-over-year increase in earnings per share is further evidence of the strength and diversity of our portfolio of businesses," said Brian Ferguson, chairman and CEO.
Sales revenue for second quarter 2008 was $1.8 billion, a 4 percent increase compared with second quarter 2007. Sales revenue for both second quarter 2008 and second quarter 2007 included contract ethylene sales resulting from the fourth-quarter 2006 divestiture of the polyethylene business. Also included in second-quarter 2008 sales revenue were contract polymer intermediates sales resulting from the fourth-quarter 2007 divestiture of PET polymers manufacturing facilities and related businesses in Mexico and Argentina.
Second-quarter 2007 sales revenue included sales from the divested Mexico and Argentina PET manufacturing facilities. Excluding these sales for both periods, sales revenue increased by 8 percent as higher selling prices in response to higher raw material and energy costs more than offset a 4 percent decline in sales volume.
Operating earnings in second quarter 2008 were $172 million compared with operating earnings of $160 million in second quarter 2007. Excluding accelerated depreciation costs and asset impairments and restructuring charges from both periods, operating earnings were $178 million in second quarter 2008 compared with $176 million in second quarter 2007. The company's second-quarter 2008 raw material and energy costs increased by approximately $200 million compared with second quarter 2007.
Segment Results 2Q 2008 versus 2Q 2007:
Coatings, Adhesives, Specialty Polymers and Inks – Sales revenue increased by 10 percent primarily due to higher selling prices in response to higher raw material and energy costs, particularly for propylene, propane and adhesives raw materials. Sales volume declined slightly due primarily to the divestiture of certain adhesives product lines and to lower sales volume in North America which was mostly offset by higher sales volume in Asia Pacific.
Operating earnings for the segment, excluding a gain related to the divestiture of certain product lines, were $51 million in second quarter 2008 compared with $66 million in second quarter 2007 as higher raw material and energy costs were partially offset by higher selling prices.