Eastman Chemical Reports Higher Earnings

Eastman Chemical Co. reported a surprising increase in earnings in its most recent quarter, boosted by recent acquisitions.

"Our earnings outlook for the year has improved due to our record second-quarter earnings," said Mark Costa, Eastman Chemical chairman and chief executive. "We expect this momentum to continue into the second half of the year."

Shares of Eastman Chemical, down 19% over the past year, rose 1.7% to $73.33 in after-hours trading.

Sales, though, for the maker of chemicals, plastics and synthetic fiber rose a disappointing 2.9%, hurt by lower selling prices in certain segments and an unfavorable shift in currency rates.

For the second quarter, Eastman reported earnings of $297 million, or $1.98 a share, up from $292 million, or $1.92 a share, a year earlier. Earnings excluding noncore items were $2.01 a share, compared with $1.92 a year earlier.

Analysts polled by Thomson Reuters had projected earnings of $1.83 a share.

Eastman attributed the increased earnings to growth in its advanced materials segment, earnings from acquired businesses and savings from lower raw material costs exceeding lower selling prices.

Sales rose to $2.53 billion from $2.46 billion, but fell below the average analyst estimate of $2.65 billion. The company cited weakness in its specialty fluids segment and its fibers segment.

The company has grown through acquisitions. Last year, it bought large alkylamines producer Taminco Corp., as well as Commonwealth Laminating & Coating Inc., a maker of window films and specialty films.

Operating earnings in advanced materials increased to $135 million, compared with $80 million, a year earlier.

Specialty fluids & intermediates earnings decreased to $83 million, down from $96 million, a year earlier. Operating earnings for the fibers segment decreased to $91 million, compared with $123 million a year earlier.

Write to Neil Haggerty at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires