Eastman Chemical (EMN) 31 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Greg Riddle	executive
James Cannon	analyst
Mark Costa	executive
William McLain	executive
David Begleiter	analyst
Michael Sison	analyst
Aleksey Yefremov	analyst
Vincent Andrews	analyst
Jeffrey Zekauskas	analyst
Salvator Tiano	analyst
Michael Leithead	analyst
Arun Viswanathan	analyst
John Roberts	analyst

Call transcript

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Operator

Good day, everyone, and welcome to the Fourth Quarter and Full Year 2024 Eastman Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman website, www.eastman.com.

We will now turn it over to Mr. Greg Riddle, Eastman, Investor Relations. sir. ahead, go Please

Greg Riddle

and everyone, Harry, joining thanks us. good you, and morning, for Thank

with Mark CFO; today and the the me On call team. are and Alexander McLain, Vice Investor Relations LaRoe CEO; Executive Costa, President Jake and and Emily from Willie Chair Board

closed, our the the and after website, financial remarks and in XXXX section fourth related full of eastman.com. slides market Yesterday, news filing, release our quarter year Investors our results and we posted SEC X-K prepared

X cover I'll begin, we Before items.

presentation, could First, certain to statements, Certain this quarter during or hear during prepared you Actual Form full call, fourth forward-looking be our are slides related the with and this including full our will expectations. filings Form preceding will the year year year and remarks events factors the in financial XXXX. XX-K be full Securities our for expectations in our XXXX differ release and plans -- Commission, and or the detailed in and XX-K results to results Exchange including materially. for and news filed filed XXXX

Second, the earnings description GAAP and directly quarter and items, this financial news referenced measures XXXX noncore including results financial most disclosures, other are release. and associated comparable in of items. Reconciliations the exclude the fourth and a certain unusual in excluded available to adjusted presentation full year

will and now the posted slides prepared night, -- into go straight remarks website Q&A. we we As our on last

Harry, please our let's start question. with first

Operator

line from first Our UBS. question come of Josh with the Spector will

James Cannon

to guidance. I for Cannon on -- the on James is wanted Josh. This AM just

like base wondering some you And the overall assuming the I just decline moving in unpack segment the you're between business. for I a Kingsport could the there. seems contribution, it assuming what pieces you're of was if think and

Mark Costa

Yes.

'XX. Advanced in year. in actual a recovery we in 'XX business success and fell short is it in challenging a environment of had earnings Materials our 'XX core all, impressive that of goals of recovering the earnings from on And sort AM's through really First good an as circular

economy know. more destocking the that into helped we challenging flat you certainly a got now, market right of as last lack move without we year all So tailwind. really certainly stable macro this is as year, And

to have own doing. which you create all So this year, your growth of we're

you when to substantial we're So pretty circular in in with is to million at being it the that $XXX $XX million $XX look for growth guide going that Advanced platform million company Materials. deliver with of the the

growth some year you again, to is, the core last When at look our we're But sort market, flat testament --. a continue through innovation core that within our and mitigate drive there a the power the business and to growth of will strategy innovation this the business think, are value that drove of year I core our creating the growth that very in that volume your to the question. in headwinds of in of

which the Advanced we've increasing prices Materials. So natural across company, up good a got in that, portion of and is gas

up shows and got a good You've that a that of Advanced in being -- headwind currency Materials. portion

gas XX good that's the in in So the portion natural of XX and currency.

some So earnings. and core offset out levels that the that mix sort volume and of of growth

cost say of core, it's building of that the top very performance. strength how in the to would that innovation then segment you with expect strong And positioned into levers as growth is it in on think still we XXXX. overall also when that help But us about then and have I management to well. well going I think stability more really the

But these about be in the anything term. out flatten don't long that to due core concerned the a headwinds. new it's earnings there's combination of I things So to sort think growth of

James Cannon

contribution look XQ Kingsport you could then assuming and XQ? Okay. what And you're maybe Got it. like what in frame in the just us for

William McLain

Yes.

So of below we end the range year, we the gave low that we in modestly as ended we the came at for look how XXXX.

the We we continue with operational to and work continues demonstrated through the in We're from in fall year. earlier since November. since XX% reduced we've DMP continual saw to and quarter, at fourth of in But cost higher the improvement we associated run our uptime well improve. you uptime yield each turnaround

reduced since and setting shutdown, strong that positioned in higher continue We rate production new production from operating -- for well and last we're operational both spend. XXXX levels

Mark Costa

add take proof build only anyone plant a great success and reason got long-term extraordinary to and teams, done surrounded get garbage such that to running. happens in the that to so and for the into complicated the and do a team the built tremendous it a high-quality And basically be build that virgin polymer turn just that for extraordinarily testament replicate. this think is plant extraordinary I up people to all plant very and point effort is is who've difficult has it invested something this this engineers, will all operators, can I who It's would such Eastman how the everyone advantaged a the technologies work. -- to real advantage competitive

Operator

Our Begleiter next the question today David line will from with Deutsche be Bank. of

David Begleiter

new Mark, administration. related of a couple questions the to

going be on Texas funding First, a thoughts project, any risk on the here? and the DOE forward that concerns could or

Mark Costa

administration. we're Obviously, close for to paying attention question. the new Sure, the David. Thanks very

under received our a there. program, First, on we contract like track feel projects DOE, so our and and the funds first good we're the with already from we've

want for U.S. up recognize President sort say, appreciate moment, back on growing To a to focus really I of I and manufacturing. Trump's

important. incredibly it's think I

just includes economy that to industrial an key lot And a base, have not that forget economic don't an materials. vertical also our security you think that's reason. really for raw both but national and an integration security without of actually -- really reason, I us for

while up U.S. over manufacturing years. And declined. last of reflect are really losing lot last America, sort a we've X so if consumption the we risk decades, where In of went that has we American in over the we're at today on U.S. competitiveness built X a

idea economy it circular X his think different project, So an I he's And supporting perfectly what is think with the driving of priority. when to reasons. on U.S. about agenda trying and accomplish I important our think, manufacturing, incredibly and you fits

First, and reshoring of resiliency. sort resiliency we for facility investment packaging, durables, Texas. we're and building supply jobs building is circular have of medical this and about country, from in and to variety the onshoring this off America you to jobs that products of Asia chain in come about vital think When other need infrastructure consumer the that food a basically

of lever into to raw a to to reshoring downstream going of jobs also people and them, supplying of manufacturing of create lot We're sort importantly, materials upstream this and as want us.

this but we and sustainable create others kind to Texas So investment, make creates just that country. this be not of in this built jobs infrastructure facility a growth, that in for recycling country. the that and as across need feeds we And into the revenue

is The independence. ground actually above Plastic and oil -- second factor it basically creates landfill. waste is sitting

you're in so way. So world oil scale advantaged a process have feedstock it it's is creating above a an we meaningful advantage and $XX, value cost as with using position, if

as are because by Imports solving that's from of competitive waste economy definition, you're no And debris advantage to likes And solved. course, U.S. Trump a whether him waste Act shouldn't important feedstock environment. third ours. problem, all want will waste. plastic someone in one count environment ] is, the Save the else's Republican They local long-term [ a in impacts a showing plastic factor, economy our the circular defined because circular local recycled create as Democrat, content the first obviously taking the and marine or is this signed topic. term, it Seas the on as not that

of excited think his fits it this. well. So sort be doing We're I that very agenda to

company, large as of a frankly, well U.S. fits Eastman, a agenda how think, his I manufacturer. given

David Begleiter

as the raises No, thoughts good. you point, exporter. And and over U.S. on What your very tariffs potential large U.S. just concerns exports? potential tariffs on are a potentially, similar Trump retaliatory are

Mark Costa

Yes.

David. So I an the back on, answer, that is on that just do made. trade point I'm U.S. think topic manufacturing important just to I I building last guess,

of along actions, long tax overwhelming sort many which companies. and addressing having will were development, pro-growth with the manufacturing, certainly sort of workforce term Eastman and U.S. et strategic think to regulations, other driving benefit I cetera, all in critical trade policy, growing

we of really quite impact back time last was that look time America. in the slowdown that. a I don't the when direct really XXXX, we we there reflect only And in sort event competition Eastman much sort face a the at frame, trade was a North Chinese well. term, impact on short When that that was And back from economic activity managed and in there had actually I therefore, of felt really

that manufacturing U.S. that we to us benefits. economy a through other stabilize lot in of of trade trade go have of helped did, of a lot to didn't But helps it sort and as So some areas friction. see the obviously, the that relevance sort

is when strong we Today global But event. now manufacturing is the today actually you into different. -- look economy weak at relatively incredibly the so versus going The then in was economy are that across where globe.

many at rate a those people positions pretty can also get limited challenging their And countries the if on focused think given they're time. be that stabilizing growing which I So weaker will in economy, aggressive, and have. economic we're

tariffs already clear on not have it's we're top recession me impact of negative more much can So manufacturing how to the in.

countries sounds really discussed dramatic this certainly there But wider what being some so actions might -- I different around a tariff and XXXX. that in it because think than have many factor while is that it, are

what's to not they seen thought I acting clear and plan. so think about a far, we that yet administration careful some and there's -- I appropriate think until have being have the deployed this

impacts me we'll for see. to way There's no this at the stage. estimate So

really forecast see trade to everything the But that significant point not I just specific said, informed impact have does we're need will actions from an say Given our I to view. actions. of include going any to

Operator

will question next Sison line Wells of Our with Mike Fargo. the be from

Michael Sison

quarter in a I year. lot quarter a adjusted versus AFP. your guidance. came in the of to end fourth third question The the stronger EBIT the on had relative Nice

a sequentially on couple why of when things But in so transcript. of talked a normally, it takes dip? you us that a bit the of about little little can bit well You did segment a give color

Mark Costa

Yes.

strength the a frankly, cash had we great the a really So great company We're that a of generated. we on flow the year. but delivered it, And first, AFP quarter. well whole about excited had and year as as earnings great

So -- both a to flow. cash AFP the and contributor the earnings was and strong

sort than it expected, both it on So better of it came how was was fronts. it in great. When came to

expected. So in volume more we in came bit a a than better bit mix came it --

out, things as We better all fills then And even X side. of than raw those gone made beyond a the we came across than part we that, way of destocking got of amount some also little And HTS certain a flow-through on we in our material expected expected. in number might better more that a that destocking. thought together normal a better. that bit have different came original outcome And products and combination of in that and those was

AM say have didn't I'd tailwinds We company. a the that's for a then of lot us market And of year destocking. and outside a for of the the lack gave sort story of for that

earnings testament in So the through defending management of to got, we and price our incredibly innovation our of contribution we sustainability can, with ASP's proposition bad value costs, growth, lever every on et is it finding is which volume true cetera. -- well, good XX% a innovation bit everywhere customers, the about spending pulling

actions delivered was it. taken was to this that So year by by little everyone company actions, deliver across tough small the a

Michael Sison

one Got margins, here. When you forward, that just you pricing. The think third some row Fibers. in levels You destocking like sustainable saw It on a a good going quick it. guidance XXX-plus about pricing business really the of that do will looks looks in are? be level. And good think this these then year how pretty

coming on it's just I XXXX a as levels. that given XXXX, such from capacity And think big there's well. some been new improvement

Mark Costa

XXXX, significantly time back Fibers So in it frame. where certainly, to the has 'XX of improved was sort back

new our are at were them it's these levels. like in So not We history.

volume are customers are I'd causing a short sort actions happening management is, everything certainly that of term, earnings key being driver set what the got the that the is are adjusted. based us, you've to In normalize. telling Inventory of say on of

customers to for cigarette margins. have of the is the XX% our tow gross than that X% greater a And You of remember margins in cigarette. are price

don't really sale. want miss they the So to

supply phenomenally when is security important tight. markets them to the So very are

as customer. stock to the safety of lot a make frame built they so they of And 'XX, time result never sure were shorting a 'XX a

under XXXX, have, look So volume commitments. greater some -- can than through expect our destocking band so is what's And I this of customers. that the dynamics going contracts up right we XX% supply/demand to And think what's hit of that higher. they on customers now. we be context. just a do But with is still the inside as in prices is bigger question But we and the overall showing these there's that

first, And is demand not changing.

So change in not modest volume we're adjustments expect any We market. the the X% being offset the end a but demand to fast, be of tow seeing of from a and, still when heat-not-burn by here, some it's to high it declining comes material to sort Cigarettes it more products still in are tow decline. that than cases, the use cigarette. growth X%

place -- is still market end-market So there. in stability, I think,

of capacity new of There roughly is in is sort market which X% added demand. some that's been China,

the this And pretty change XXXX, modest retail channel, did in inventory added because in capacity than time that current that kind comparison adds frame. in was when time have It it the compare China massively back look their in small also was you XXXX they higher to and destocking So in aggressive of of in in way. to the was the amount a decline significantly makes XXXX Chinese overbuilt we're capacity integration market that through demand this backward that frame, very significant. back this XXXX,

conditions And very now, together we're them in modest. XXs. probably are these when low put now lot the you for going more a tight to from condition market utilizations So a

occurred adjust low-cost current in this adjustments lot serve And their while dynamic to we companies also industry So existing this the what stable seen capacity volume. some in adjusts align sort on, to past. more certainly than high-cost see we've as think we the a it being going of historically, the of capacity market

a still there's and asset out -- there. So high-cost

attractive reduction way to So we're significant that over still just plays to very taking area and course, cost this is years the going across for into the company actions also we'll for a waiting our competitiveness. and the Of but company, of to a also see how market. cost think couple this normalize this at next We're business sitting out, applies around -- as we amount of the continue for and not level manage

been is right? about on of haven't sitting from on we either, diverse important. laurels cellulosic that we talked And the known our portfolio deep as one We've to ways grow a dive incredibly the this chain

lot and opportunities products lot So growth and growth other growing. keep the it of stream Aventa of in to a Naia, opportunities some in drive

So make we innovation where about all feel and stream good we're the going whole this at investments we've forward. to vital made

Operator

from KeyBanc be will line of question Yefremov next Aleksey The Markets. the Capital with

Aleksey Yefremov

your Reading Materials' about to about ask this I rapid year. night blessing. quite was wanted a Advanced you [indiscernible] question outlook a last

was the costs margins higher raising could pinch and there's that discussing in You're you'll prices your half first be that lag. a that

at Materials of think So which rate under should we earnings are in you they'll first exiting dynamic run year? the the that as Advanced half be somewhat

Mark Costa

Yes.

more complicated it's dynamics there's a little a this and most. going of year look, on, lot So than

that's into the out other you've $XX and in QX. got Advanced corporate Materials quarter, costs of So million roughly of going moving in first

started year-over-year year. in a start for mix basis, that headwind. And actions it's well growth the as will good in reduction starting leverage we QX and year, on December we're earnings cost our impressive a delivering some maintaining which that into So November volume that's which price with -- for the to and and discipline forecast offsetting this obviously, as

that going So through year. that you're will fill of benefit, definitely to the see some but

that through look the are So year, helpful. got cost in benefits the you the you've coming as through year

in of -- increasing sales a half up economy ramp flows the flows helps You've first headwind got inventory how that go they're definitely a of good going out up. I and through as million natural ramps that those energy earnings mentioned to inventory earlier, year gas you've and the that's flow and into half then with Offsetting portion that, of loaded the into as the back costs costs. that in $XX circular and it half utilization relative to energy costs back segment, got the be

a there parts. of lot So moving are

deliver well back lot as attractive look results and to is it's half. there's pluses the the for year, you very minuses positioned but half, a think segment of -- I overall first

Aleksey Yefremov

wanted to filter also follow on I And up the tow.

to contract in now. your used through the right you past, annual go about So negotiations

So in if wanted gained I visibility of any your et you you beyond to ask of of contracts prices, here a... portfolio margins, in kind terms volumes, XXXX cetera

Mark Costa

customers, provide that a to lot with about not all of but to So and from annual we a to talked process -- number an all, a number a that big stability. of especially contracting switched you of process the past quarters. We've we probably XX%. them, volume about where ones, that, place over it's the said, as in process higher XXXX, but actually contracted I still contracted XX% it's in have, in We XXXX. XX% is probably that to And than the have of closer multiyear

multiyear So price volumes certain of we this sort we and a amount that to adds feel in have that and good stability how place business. stability about of contracting this

have But the manage sure adjustments their we it's to right levels that make inventory year. have this customers those make respect how with on to and them to to demand at and also our working

Operator

Vincent be with will the question Stanley. Andrews next line Morgan The of from

Vincent Andrews

the great. still, which running It is plant is sounds like well, methanolysis

could side a the bit you of the little about volume talk maybe equation. So sales

those in to companies were year as sales sort I just think introduce early what with run you opportunities not lines. some miss and plant innovation to little well wanted the of it expected. you do consumer products maybe to last able think the to And bit when to the a tend year, the as of below had I be being in some

of some consumer how off this as as in plastic high-profile the sort So from backing that point book of the then well year brands the recycled from could perspective at you some seeing their of talk on order some targets. you're about

your So where all in that this sales just are on we year? view and for

Mark Costa

you spend question, things I team a lot with of my on circular. topic this time guess, great a the might all as and And That's Vince. personal

deep and conditions have all, topic think we our of of well beyond the covered dive that this changed. not on and I at market this First year both fairly perspective sort the

helpful, the substantially challenged are right when that customers then, points same you've are at combined sort buying manage and all So the they're to recognize that back the our to rehit macroeconomic choices. trying we're first, demand, and changed. But as key the to has mean, we not in time these that So is conditions well make I nothing of we an got with have weak and to right? attitude brands they're economy discussed having that as inflation that about through what consumers' prices, now,

I has think reduced the to ramp which developed. that so funnel And all And on to we're at But brands solid up the markets different similar sort serving. has I are orders. see converting believe their that a we're across track of we the pace

which It's have premiums paying already and the a customers bit at they're have side, we different those When look at. depending renew over to for durable already you market look you committed who XXX on products.

in growth of So where around a something the we -- focus the cannibalize the necessarily and way a launches weak them new not been create like I really need market pace. grow their they an there's shelf and to their are sort help do splash where their can in where in market product a upgrade efforts that's immediate that new there's They because but want we just lack moderated the of but in and own of of share interest a something see demand in can product, on to they less and don't the products. underlying that, doing see kind improvement interest do

pretty that. pretty of we see for So I that's as a a us still and lot sensible, happening think aligned of growth and result

built the side, you remember at really to first have On recycled consumer packaging not plant we is that the aimed PET. here

and to the summer, in the able will PET over the of PET to converting are customers half that number sell recycle by year with some line different believe be of make we where We back will successful. a be we a

very mean from the broader recycled reality of the need on that view any Trump. content. equity them And level now, brand brand invisible, long-term to asked, there's to. products. engagement plastic including you their consumers' It's are climate point brands don't focused dinner at a people we every sort party Vincent, people are the that of how comes up or And sort to in President every much and the think is I think changing to day. on lives cocktail question session their and backing their off signs consumers tell waste. the like go around I sort of the commitment you an see I change. really I issue of right where can't don't debating it I tangible everyone's in

to sure not they debating I'm a for sacrifice do what that doesn't them implied said, they can Trump make. feel mean, I like bipartisan. I And as people I'm have and Seas it's But products of really have they seeing waste. it's the Save plastic Act. issue not an signed choices even anyone's a big support now President that. some your that want And to about something to compared climate

-- of plastic reasons much But media I waste. So don't a bit lack that economic still think that there's after a are I'm not moving issue. sure are I going NGOs, slower. the it's think brands very The

state say, the regulations driving I'd level. are Europe more forcing states, they agenda states U.S. committed make this at can that as post-election And in choices out as the in well to the they're change -- coming are in multiple many driving what in certainly with and in

think don't context is So changing. I that

I the we're think moderated be it's to in economic environment in. reasonable

Vincent Andrews

of a things remarks like the impact tariffs around separately, that. of guidance. coming the and was sort look like if your negative doesn't customers being fourth And there it talked is out just some prepared having I in or up that could quarter But volume on about that's Okay. follow first your preparing quarter

or sort of the particular material that So loading? in segments any of was

just not that back that coming correlated is first And it's quarter, I customers don't of is of -- to out a lot the of just function in have just question they sort if a inventory? guess

William McLain

agree. the year-over-year impact with year growth question. It books that our a are order fully and yes, definitely for we're And I was the I QX there be strong, that volume We're in mix the Fibers growth absence volume see the well we specialties that than price/cost inventory the expecting as as be And with cost, in to start-up the Thanks QX. the modest destock. that's mix, entering on of QX. in support more in offsetting along going

we're So visibility. good right now,

Operator

And Frank the question with from be next will Mitsch Research. line Fermium the of

Unknown Analyst

on Aziza is It's My net or -- you for was $XX reduction majority on the to where Frank. of that question regions XXXX. cost the first the for on occur? million expected elaborate of Can

William McLain

Thanks, Aziza.

are in environment. compete focused our to challenging definitely on the structure, cost We this and improving is

plan gross to and comprehensive and our innovation we're focus on Our complexity products setting optimizing term. in realization, usual And that operating operations. our cost would key improve our operations highlight to inflation. that's success maximize has beyond margin I goes success long and and driven

This right was going there's our in weak MRO manufacturing to usage of ]. And the and contractors be significant environment. meaningful improvements, this now, optimizing also, purchasing those opportunities [ yield

natural we gas shutdown line. rising with on drive interlayers We also of our key. some the you would operations did asset base, global to the some in XXXX that of optimize energy And have prices, will efficiency opportunities as expect, with and be our resin

be it We're this will segments. segments, And that plan. aggressively on be million stay key. global across operating forward moving we're about environment, this not To in all $XX will operating standing competitive we still. X As think

Unknown Analyst

customers, and And a on Great. auto with of your terms are in your the curious I Europe? builds recovery was their in auto conversations expectations U.S. what in

Mark Costa

our line globally expectations of automotive in I've to what hearing So the on marketplace in are 'XX and going in I with pretty versus slightly where down. sort far in probably so the the been be auto think sector, are demand 'XX

bit -- be Europe sales being more maybe given the in given especially up had China a bit both the given it's American lower QX. is, already a think I flattish how likely that it strong low might they and being

its successful that I look is own market would business high delivered note that you mix a was opposed growth single-digit down, been just at So absolute right? slightly very if this we creating improvement to XXXX, as volume. in in largely for growth,

wide different quite our a all our features. range from well standard the to margins to The that different acoustic price vastly quite as of color solar rejection, here as special products are heads-up display interlayers have gradient interlayers We product points of and kinds across or our slate.

dramatically in end So lift is market market on the And as growth. our functionality, these we're upper even before that you this growing of in a actually from layer growing mix huge addressable there's sales. the mix

has So they're there's territory on moving inches a sunroof X so be battery. drivers they're even we're feel laminated from of help sitting So EVs, claustrophobic per their to lot as side the is of With things right? growth car, to the where seeing to because more windshields not lamination. sunroof so big

we're limited lot And lamps sunroofs. getting. So bigger It's are that including of to moving a not and there's to the EVs. cars side it's ICE territory

I installed getting just more being are products are value also these these as We said, product, value higher in windows. per with

as growth levered as with associated mix got a flat market. basically well you upgrade volume So

to of So finding our sort create we growth. ways continue own

Operator

the of Jeff question line next JPMorgan. be will Zekauskas Your with from

Jeffrey Zekauskas

I cash with the think isn't flat your flow operating billion, growing? forecast XXXX for flow Why which operating 'XX. cash in $X.X is is

William McLain

XX improvement cash for EBITDA is working last our to capital taxes. now, our around cycle days. in conversion operating cash expectation baseline largely largest cash question. couple which will higher is Right year offset plan flat due growth. is this our Thanks for that with for the base stay the driver being years, That's The of

team and is the unfolds, And to global and our flow. much Eastman, as entire that challenge delivering as possible. cash then Obviously, deliver focused deliver environment as is on at the cash that upside to

higher no taxes be So There's that cash. cash in focused in will but we're there XXXX. on change commitment

Jeffrey Zekauskas

Okay.

together, move tended XXXX, down And In conversely, and income perfectly, not the lot other make in Secondly, you'd Advanced Chemical direction? and in fourth and move should up, then went move have Intermediates in AFP. same they income operating Chemical don't something to that move you'd Chemical with In it, of Materials Intermediates Advanced get went direction? Chemical about has then in a historically, general, whereas words, businesses changed and would other general, in and X those Intermediates Materials you X to there a the in in I AFP. divisions but lot levels the Intermediates. the been see Should divestitures quarter. that the expect Or same they we Eastman correlated? in And make be

Mark Costa

And no, good hear it's the Jeff, you. from to actually opposite.

directions. So in they tend move opposite to

go visiting when the if growth you commodity in margins -- went going where inflation us, lot blowout you 'XX, saw value was frame. those to was a whole in of look really dramatically. pretty by by offset if you certainly the of high, volume the strong in that demand really tight back including a earnings was materials at up that industry, and So being But increasing time chasing up. We prices were raw specialties mix 'XX pace

sort And you the but so prices. have by it's you volume very chasing -- but growth, the mitigated demand, of when you have certainly don't strong

natural there's actually the specialties. the between of So a versus hedge CI how a bit segment operates

the same products compared of and and balances lot to center diversity stability a ]. we how sort addition to where big specialty some relative being portfolio the in a create of [ portfolio innovation the to of market, a part in stability of strategy actually our out part this does our And growth Intermediates of the small Chemical thing,

Operator

be question The Patrick with today the of Citigroup. Cunningham next line will from

Unknown Analyst

Which materials the issued Zango for -- Patrick. do ] ] inflationary MP higher and In guides higher [ This to inventory material XQ prepared remarks on costs. RM [ is AM, be on for cost XQ? And a base you benefit. raw anticipate CI, in raw Eric XQ 'XX the

William McLain

say as Yes. years, think obviously, about the had between transitioning I NGLs. we would we've

So Also booked been the Those the propane has natural higher. we the are things. forecast key for gas.

through declined As was was paraxylene we better expected. primarily it it ] bit that went of we little a the relates quarter [ QX, to the benefit decline as and than that

Unknown Analyst

on the then strategy you A project and you prepared more business execution. some reductions, wins And mentioned million headwind. a Could new it. comments, in and insight FP, the provide cost Got $X the mitigated and

Mark Costa

Sure.

growth lot expected that sort to ] serves AFP year So markets back the very and growth having sort of on businesses, great continue modest this last the versus it a modest [ of went of about side, a year. stable that to thing 'XX the stable, growth

core that, so that demand, gives got seen that got certain ag, you've a pharma the you they water don't of ]is innovation stability [ last but growth, their you've continue. nice going relative too. foundation. -- that. -- drivers own drive have on year And you're will those you've top to get because applications, that a -- When volume And have to then And there's ratio in of aviation, we destocking, amount moderate

semiconductors, example, we're that got series growth cellulosic in LNG to that set fluids, driving we're 'XX, of for progress time. we've these more some the making 'XX transfer helps We've but -- provide experiencing products make that in applications at you that forward of got solvents than that a wins talked new we some benefit continue to So heat a some of for about front. we winning on of are which high-purity and all is stability sort

innovation has exposure there's much of Materials not as but discretionary It's not there. Advanced than quite benefit as market it has. So facing Materials Advanced as big the

last and also stability spread this just that expansion they rolling benefit the say managing phenomenal benefiting as value the the from and and their we're this more I'd across program the up. of help done products a to also we year, into year commercial and reduction price of get We've and offers go year segment some cost it excellence

get that So year year. was an top earnings performance what you improvement of that's last continued on extraordinary this why

Operator

line The Bank the America. of Tiano from Salvator with question of be will next today

Salvator Tiano

much go $XX in customers something I [ the may found mention But and need second sight, right have line So Kingsport million that or bit did to targeted to or what's want half. essentially, most of that you just firstly, -- second of already much but happening, in January? And improvement volume meaning have operating they reached the the rates now half of ]? already the not of books may they that you already how as the your that wondering methanolysis. AM little a the of that's that already how earnings have back I'm will come in So of have you you -- in is

Mark Costa

Yes.

But quite grow are to that launch as a mentioned then. existing that bit, products business, answering can and those and today there is So of reference much dive you in provide back this it charts a you'll lot pretty the see deep there's view in year. detail was same XXX-plus I question, in that still that this that continuing customers the it's we as

good And so the that's of demand. portion a

business fast the orders. unique already the closing. is there we of every and what it. year. just It's of this The up still do is these to and of year closing getting lot the through not established then a show good how news is business platform where pretty we're product the circular And lot use in to businesses well orders a applications about It's

building it, call we're on business that versus closing. in what half so, And business is half, existing

Salvator Tiano

capital a million the little is Out million allocating CapEx, less. you to to making money, are regard despite that you how Okay. mentioned, spending much more buybacks with long allocation. view $XXX And you bit go just to wanted to the $XXX -- of expansion? in are the And

for is in So some leaving above XXXX that number upside? way about Are [indiscernible]? capital no $XXX go you M&A? is has million this bolt-on there free you Or thinking that a

William McLain

first What million is I is, $XXX on base reminder, say around our would mark. as CapEx a CapEx just that

well. range like growth to including our I as the that ramp be is Texas receipts. you keeping to through largest $XXX single growth Texas also and And other that expect growth range. the our yes, the in site So year, project expect cetera, DOE -- plants about would our for ultimately et Tritan of expansions, the $XXX million we be reliably, expected running about projects year in as as million our Longview, to think net there's would commitments grant we but think you programs, running up the

increased I would top dividend to On XXth of allocation we've the again, year. think about what share idle. is end sit we're I high And to XXXX. in repurchases going for not On the say cash let the our front, capital as -- of that, went we

to our EBITDA net great cash is a going situation. debt and use So to we're in

we'll flexibility, So and leverage value maximize that to for financial we have shareholders.

Salvator Tiano

much just Okay. that's grant the included CapEx. How is mentioned that? DOE Perfect. Sir, essentially in

William McLain

amount, to received I We're specific highlight $XX we not that going million to in will but the be just XXXX.

Operator

The next question today of will Leithead Barclays. be line from with Michael the

Michael Leithead

in 'XX. you product a it in like profitable selling EBIT that fairly First, or not some Fibers, you're now seems had

a So there? more provide bit just can you context

Mark Costa

customers' it XXXX in strong is is very, it's Part this catch of you in what for energy that case, this marketplace guide a normalizing. details Part what products the there's being about headwind in change a up. are and product. particular talk design of a discontinued. to very in of was it there CPTs in segment to need levels We of the product. very this can't it high-value is. how But performance and They just provided we're 'XX. part we a of good And So drivers from right? -- detail that is we their currency, a understand Part of multiple this of destocking. in so it was So it good made of as the what's sort performance offering multiple was

Michael Leithead

funding there's your bit review a then, Great. you on in or product like contract? or has the Mark, I it spending. about a taking just election, such mentioned created know seems committing lot a a your in broader and the DOE receiving But That's to funding. uncertainty delay comfort customer been just to helpful. green recycled your And broader of a pause post pause of conversations regulatory earlier

Mark Costa

at impact We've not stage. seen any this

we're right? So as of any be to trying matters. companies to improve is consumer That's of economic cost something a drive change manage. no a programs don't behavior. weak earnings waste where don't spend of see just seeing and we impact like, in a environment, inflation where they and environment But plastic careful As everyone certainly that's with I just weak said, causing I'm they're to is economic customers an reduction sort natural to sort I I money packaging. longer think need on

doesn't very having. it's in impact is Climate their different the and a like everyone topic then waste environment

on value But a lot the any seen with sort we long-term trying confusion that think we've mean of interpret I going don't what of shift that now significant activity I the on it do feel of in front. think good means. to the different and administration circular right So everyone's platform. there's all I about

Operator

with Viswanathan from question next the RBC. The will be of line Arun

Mark Costa

you. hear can't we Arun,

Operator

[Operator Instructions]

Arun Viswanathan

here. the on results Congrats

just So I guess maybe X questions.

some as some what the customers some go? -- maybe off, as there, interest? from hearing that diminished first higher efforts you've I maybe your So had know far still are you circular cost

QX, appears slowdown that. weather And or than of anything by then the doesn't like outlook little it some or secondly, your peers. a as impacted seem bit But you're being winter like much stronger your

items. can maybe you on So just X comment those

Mark Costa

Sure.

volume but think I addressed economic of first of a question lack ] couple in of a So We're seeing not [ already ace I've the build engagement. other answers. moderation

that to and both comes in I Intermediates going were where question, some environment competitive feel competitive acetyls you now right of sort products is Chemical around second it in Chemical that and olefin in the with When question Intermediates, the the of we think certainly challenges see pressure.

recognize the year going Our we reliability we facilities impact on while investments front our great of have our business, that's Because that stability. last for a is in made lot outlook relative year. to

So volume we're on track this to sell more to year. have a lot

of that be lot export A sales. will

currency currency in in So offset certainly and in at exposure it's local more waiting a sits. moderate but still reduction cost we we're Fibers and AM markets don't That's the have And all all of to value in its because place, much the that is where get exposure in CI. slice for grow, spread. again, cost they plan the helping have the benefits they

So that's in or not here AFP for that a headwind matter.

that that So is volume question, and your that it how moves Is ]? stability additional Arun forward having [ in helps it have cost actions. the some

Arun Viswanathan

outlook wanted QX? before. But just that pull impact there well kind tariffs forward of to dynamics? I whether relates prebuying or as it a this was in to I And your any ahead other clarify as if -- of does QX missed apologies

Mark Costa

question part volume that beat. was the Yes, it of addressed and we modest earlier

Greg Riddle

last, our next think I please? is question the

Operator

line the John from comes Roberts question of with next The course. of Yes, Mizuho.

John Roberts

current the is transfer dead? We've helpful administration that now to fluid projects. heat delays opportunity business. guess thermal on solar would the several I Is the had fluid, not

Mark Costa

see I the John, didn't solution coming.

today's John. don't It finale used especially energy, solar and in the PET to do in ] heat actually very in anymore your [ diversifying made transfer We've point, be tied on But to current application we businesses, solar fluids. LNG. significantly progress which into a much pretty our PET. base So we've as X environment pretty that challenged, business good really are especially to diversified economic

of fluid. fluid So a these version -- facilities for a cases, facilities it's many those in actually been a bit And transfer and diversification. that's transfer high-value require great heat heat quite very of

as -- we relative number of will last just LNG delays, because of help as and much a that sort beyond, there's growth delayed. certainly big won are we're getting not tailwind we to go But a expecting And because capital year in earnings of in projects of fills build year this these -- that forward. 'XX we've

Greg Riddle

appreciate everybody And We a hope us. weekend. Thanks again, ]. everyone, in for you joining has Eastman. I interest your [ Thank great

Operator

This participation. for concludes your you Thank today's call.

now disconnect. may You

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