Eastman’s 3Q earnings reflect improvements

KINGSPORT, Tenn. – Marine industry resin supplier Eastman Chemical Co. has released its results for third quarter 2004, reporting earnings of $0.49 per diluted share versus a loss of $4.35 per diluted share for third quarter 2003.

Included in third-quarter 2004 earnings were asset impairments and restructuring charges of $42 million and a net deferred tax benefit of $8 million. Third-quarter 2003 results included asset impairments and restructuring charges of $496 million, the company said in its press release.

"Despite continued increases in raw material and energy costs, our earnings in the third quarter and first nine months of 2004 confirm the improvements we have made in the company that have strengthened our profitability," said Brian Ferguson, chairman and CEO. "We are on track for full-year 2004 earnings to be our best since the year 2000."

Operating earnings in third quarter 2004 were $73 million compared with an operating loss of $440 million in third quarter 2003. Excluding asset impairments and restructuring charges for both periods, operating earnings were $115 million in third quarter 2004 compared with $56 million in third quarter 2003.

The year-over-year improvement was attributed to higher sales volume, an ongoing focus on more profitable businesses and product lines, and cost reduction efforts. The company also said that increased selling prices were more than offset by historically high raw material and energy costs, which increased year-over-year by over $150 million for key raw materials.

Sales revenue for third quarter 2004 was $1.65 billion, a 14-percent increase over third quarter 2003. The increase in sales revenue was primarily due to higher selling prices and higher sales volume. Third-quarter 2004 and third-quarter 2003 results included sales revenue from restructured, divested and consolidated product lines in the coatings, adhesives, specialty polymers and inks (CASPI) segment.

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