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Sales revenue increases at Eastman's Fibers segment
02 Aug '10
5 min read
The higher selling prices were in response to higher raw material and energy costs. Operating earnings excluding restructuring charges in second quarter 2010 increased to $72 million compared with $1 million in second quarter 2009. The increase was due to higher selling prices which more than offset higher raw material and energy costs, and higher sales volume and higher capacity utilization which led to lower unit costs. Second-quarter 2009 operating earnings included approximately $15 million of costs related to the reconfiguration of the Longview, Texas, manufacturing facility.
Performance Polymers – Sales revenue increased by 20 percent due to higher selling prices and higher sales volume. The higher selling prices were in response to higher raw material and energy costs. Sales volume increased due to improved operations of the IntegRex-based PET manufacturing facility.
Operating earnings in second quarter 2010 were similar to second quarter 2009 as the favorable impact of improved IntegRex operations was offset by the impact of continued difficult market conditions for PET in North America which limited the ability to offset higher raw material and energy costs with higher selling prices.
Cash Flow
Eastman generated $206 million of cash from operating activities during second quarter 2010 due primarily to strong net earnings. Excluding the $200 million impact on cash from operating activities in first quarter 2010 of the adoption of amended accounting guidance applied to the company's accounts receivable securitization program, the company expects to generate free cash flow of approximately $300 million for full year 2010. Free cash flow is defined as cash from operating activities less capital expenditures and dividends. See Table 5A for reconciliation of net cash provided by operating activities to free cash flow.
Outlook
Commenting on the outlook for third quarter and full year 2010, Rogers said: "Our strong first half results give us positive momentum heading into the second half of the year. We expect to continue to benefit from the combination of the economic recovery and growth initiatives we are implementing. We also expect our volumes will reflect typical seasonal declines in the second half of the year and that raw material and energy costs will be less volatile.
Taking these factors into consideration, we expect third quarter 2010 earnings per share to be between $1.65 and $1.75 per share. In addition, we expect full-year 2010 earnings per share to be between $6.20 and $6.40." Any charges related to restructuring actions are excluded from earnings per share projections.
Performance Polymers – Sales revenue increased by 20 percent due to higher selling prices and higher sales volume. The higher selling prices were in response to higher raw material and energy costs. Sales volume increased due to improved operations of the IntegRex-based PET manufacturing facility.
Operating earnings in second quarter 2010 were similar to second quarter 2009 as the favorable impact of improved IntegRex operations was offset by the impact of continued difficult market conditions for PET in North America which limited the ability to offset higher raw material and energy costs with higher selling prices.
Cash Flow
Eastman generated $206 million of cash from operating activities during second quarter 2010 due primarily to strong net earnings. Excluding the $200 million impact on cash from operating activities in first quarter 2010 of the adoption of amended accounting guidance applied to the company's accounts receivable securitization program, the company expects to generate free cash flow of approximately $300 million for full year 2010. Free cash flow is defined as cash from operating activities less capital expenditures and dividends. See Table 5A for reconciliation of net cash provided by operating activities to free cash flow.
Outlook
Commenting on the outlook for third quarter and full year 2010, Rogers said: "Our strong first half results give us positive momentum heading into the second half of the year. We expect to continue to benefit from the combination of the economic recovery and growth initiatives we are implementing. We also expect our volumes will reflect typical seasonal declines in the second half of the year and that raw material and energy costs will be less volatile.
Taking these factors into consideration, we expect third quarter 2010 earnings per share to be between $1.65 and $1.75 per share. In addition, we expect full-year 2010 earnings per share to be between $6.20 and $6.40." Any charges related to restructuring actions are excluded from earnings per share projections.
Eastman Chemical Company
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