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Eastman makes solid operating cash flows in Q1

24 Apr '09

5 min read

Fibers – Sales revenue increased by 2 percent as higher selling prices and a favorable shift in product mix more than offset lower sales volume. The higher selling prices were in response to higher raw material and energy costs. Sales volume declined as higher acetate tow volume was more than offset by lower volumes for acetate yarn and acetyl chemical products. Operating earnings, excluding a restructuring charge in first quarter 2009, increased to $73 million in first quarter 2009 compared with $68 million in first quarter 2008 due to higher selling prices and a favorable shift in product mix, partially offset by higher raw material and energy costs and lower sales volume.

Performance Chemicals and Intermediates – Sales revenue declined by 49 percent, and excluding contract ethylene sales resulting from the divestiture of the polyethylene business, declined by 42 percent due to lower sales volume and lower selling prices. The lower sales volume was primarily in olefin-based derivatives and is attributed to the global recession. Operating earnings, excluding asset impairments and restructuring charges in both periods and accelerated depreciation costs in first quarter 2008, were $3 million in first quarter 2009 compared with $61 million in first quarter 2008. The decline was due to lower sales volume, higher unit costs from lower capacity utilization, and lower selling prices, partially offset by lower raw material and energy costs.

Performance Polymers – Sales revenue declined by 42 percent, and excluding contract polymer intermediates sales to divested manufacturing facilities in first quarter 2008, declined by 29 percent due to lower selling prices. The lower selling prices were primarily due to the steep decline in raw material and energy costs, particularly for paraxylene. Sales volume excluding contract polymer intermediates sales was unchanged as increased volume from the company's IntegRex™ technology based PET facility offset lower volume from the company's conventional PET manufacturing assets which were significantly rationalized in first quarter 2008.

Eastman Chemical Company

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