"Our third-quarter results reflect the contribution of our innovation-driven growth model, continued cost management, and disciplined capital allocation," said Mark Costa, board chair and CEO. "We delivered six percent top-line growth in our specialties, advanced materials and additives & functional products, and sequentially stable earnings in fibres. The operating results and a lower effective tax rate resulted in solid year-over-year EPS growth. This performance, especially when considering global economic uncertainty, gives us confidence in the resiliency of our portfolio and the sustainability of our strong cash flow going forward."
In the fibres segment, sales revenue decreased primarily due to lower acetate tow sales volume attributed to customer buying patterns and lower acetate tow selling prices attributed to lower industry capacity utilisation. The lower sales revenue was partially offset by sales of nonwovens innovation platform products previously reported in 'Other' and strong volume growth in the textiles innovation platform. The adjusted EBIT decreased primarily due to lower acetate tow sales volume and selling prices, partially offset by higher textiles innovation platform products sales volume and earnings.
Eastman generated $395 million in cash from operating activities during third quarter, primarily due to strong net earnings partially offset by increased working capital. Share repurchases totaled to $125 million.
The company expects to generate approximately $1.1 billion of free cash flow (cash from operating activities less net capital expenditures) in 2018. Priorities for uses of available cash include payment of the quarterly dividend, repayment of debt, funding targeted growth initiatives and repurchasing shares.
"During the first nine months of the year, we delivered a 13 per cent year-over-year increase in adjusted earnings per share. This performance continues to be driven by strong volume growth in the specialty segments leveraging our innovation-driven growth model, as well as continued disciplined cost management, use of our robust free cash flow and a lower effective tax rate. Despite facing challenges in the global economy, we remain confident in our expectations for adjusted 2018 EPS growth to be between 10-14 per cent," Costa said.
The full-year 2018 projected earnings exclude any non-core, unusual, or non-recurring items in the remaining three months of 2018 and assume that the adjusted effective tax rate for first nine months of 2018 will be the actual rate for full year 2018. (RR)
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