Eastman Chemical (EMN) to Hike Prices of Resin Intermediates
21 December 2017
Eastman Chemical Company EMN will increase the list and off-list selling prices of resin intermediates. The price hike will be effective from Jan 1, 2018 or as contracts permit.
The company will hike the prices of Eastman NPG (all package types) by 3 cents per lb in both North and Latin America. Eastman Chemical is taking appropriate pricing actions amid an elevated raw material pricing environment.
Shares of the company have underperformed the industry it belongs to over the last six months. The stock has gained 10.9% compared with the industry's nearly 16.3% rally.
Eastman Chemical expects to drive growth on the back of innovation and high margin products amid an uncertain global business environment. Eastman Chemical except adjusted earning per share growth in 2017 the top-end of the earlier projected range of 10-12% year over year, excluding the financial impact of the Kingsport operational incident.
On Oct 4, Eastman Chemical's Kingsport coal gasification area suffered an operational incident this year. However, there were no reports of any adverse impact either on the environment or on human health. According to the company, all areas of the manufacturing facility have resumed operations with the exception of coal gasification.
Though Eastman Chemical is still assessing the financial impact of the incident, it is expected to reduce operating earnings in the range of $50-$100 million. Furthermore, it anticipates costs associated with the incident to be around $100 million in the fourth quarter.
Meanwhile, Eastman Chemical remains focused on cost-cutting and productivity. The company should also gain from its strategic acquisitions.
Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. KRO , Koppers Holding Inc. KOP and Westlake Chemical Corporation WLK , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Kronos Worldwide has expected long-term earnings growth of 5%. Its shares have skyrocketed 115.1% year to date.
Koppers has expected long-term earnings growth of 18%. Shares of the company have rallied 24.8% year to date.
Westlake Chemical has expected long-term earnings growth of 10.6%. Its shares have soared 83.8% year to date.
Source: nasdaq.com