Eastman Chemical Q1 net earnings dip on low sales volume

Plastics and fibers manufacturer Eastman Chemical Co. recorded net earnings at US$2 mln for Q1 - 2009 as against US$133 mln for the same period in 2008. The results included a restructuring charge of US$26 mln for the previously announced reduction in force of approximately 300 people. The company posted sales revenue of US$1.1 bln, a 35 percent decline compared with Q1- 2008. Operating earnings for the period stood at US$25 mln compared to US$168 mln for the same period last year. Excluding one time charges, operating earnings were US$51 mln for Q1 - 2009 compared with US$187 mln in Q1 - 2008. Expecting a 'modest improvement' in demand, the company is looking forward for capacity utilization 75% - 80% for the rest of 2009. Operating results declined in all segments except Fibers because of weak demand which resulted in lower sales volume, continued low capacity utilization, and higher unit costs. In addition, lower selling prices were offset by lower raw material and energy costs. However, operating results benefited from continued implementation of cost reduction actions. Except for 'Fibers' segment, all other segments recorded dip in sales revenue with 'Performance Chemicals and Intermediaries' segment revenue plummeting 49% for the quarter. The 'Performance Polymers' segment saw sales revenue down by 42% and 'Coatings, Adhesives, Specialty Polymers and Inks' segment posted a 36% decline in revenue primarily due to lower sales volume. Further, 'Specialty Plastics' segment saw revenue dip by 30% due primarily to lower sales volume.
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