Eastman reports stagnant sales and dip in profits for second quarter
The Tennessee-based company, which is a major player in the active ingredients and polymers categories, as well as packaging for the cosmetic and personal care market, reported that revenues for the quarter were $1.85bn, compared to $1.88bn in the corresponding period last year.
Eastman recently announced the acquisition of specialty materials company Solutia, which it says impacted results for the quarter, mainly due to a $33m financing charge for the transaction and integration of the business.
Profits hit by acquisition costs
Although the net profit figure was not revealed, the company said that its operating earnings in the second quarter 2012 were $317m compared to $333m in corresponding quarter for 2011.
Taking into consideration the transaction and integration costs related to the Solutia acquisition during the quarter and a gain from the sale of assets from the second quarter 2011, the company pointed out that the operating earnings were $323 million and $318 million, respectively.
"The integration of Solutia is well underway and our capture of cost synergies is on plan such that we are poised to deliver earnings growth and generate significant cash for years to come," said Jim Rogers, Chairman and CEO.
Performance chemicals and intermediates reports steady sales
The performance chemicals and intermediates division, which serves the cosmetics ingredients market, reported that sales revenues were unchanged for the quarter, with higher sales volume and a more favorable shift in product mix largely offsetting higher selling prices.
In the specialty plastics division, which serves the cosmetics packaging market, sales revenues declined by 6 percent during the quarter, which the company said was primarily down to lower sales volumes, although this was partially offset by a more favorable product mix and higher selling prices.
"Despite persistent global economic uncertainty, we continue to expect double-digit year-over-year earnings growth resulting from the solid performance of heritage Eastman businesses and second half earnings from the acquired Solutia businesses,” Rogers said.
