Eastman Chemical Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Sales revenue increased 8% year-over-year to $2,385 million in Q3 2026, driven by a 7% increase in selling prices and a 1% increase in sales volume/mix.
• Earnings before interest and taxes (EBIT) rose to $305 million in Q3 2026 from $188 million in Q3 2025.
• Adjusted EBIT increased to $305 million in Q3 2026 from $210 million in Q3 2025.
• Earnings per diluted share (EPS) reached $2.19 in Q3 2026, compared to $0.60 in Q3 2025.
• Adjusted EPS was $1.84 in Q3 2026, up from $1.14 in Q3 2025.
• Net cash provided by operating activities was $290 million in Q3 2026, down from $402 million in Q3 2025.
• Operating cash flow for the first nine months of 2026 totaled $377 million.
• Net earnings attributable to Eastman were $252 million in Q3 2026 versus $69 million in Q3 2025.
• Total borrowings were $5,218 million as of September 30, 2026, compared to $4,787 million as of December 31, 2025.
• Net debt was $4,450 million as of September 30, 2026, compared to $4,221 million as of December 31, 2025.
• The effective tax rate for the first nine months of 2026 was 15%, compared to 30% for the same period in 2025.

Guidance and Future Outlook:

• Full-year 2026 adjusted EPS is projected to be between $6.00 and $6.20.
• Full-year 2026 operating cash flow is projected to be approximately $850 million.
• Management expects to deliver solid full-year performance in earnings and cash flow despite a challenging macroeconomic environment.
• The company anticipates sequential demand declines in Q4 2026 due to normal seasonality and customer caution, partially offset by innovation-driven growth.
• Additional price actions are being taken across the company to address accelerating raw material and distribution costs.
• Higher planned shutdown costs are expected in Q4 2026, partially offset by the continuation of cost actions.
• Eastman expects to have higher sales volume in Fibers as customers meet annual contract commitments.
• The company remains on track to deliver $125 million to $150 million in cost savings, net of inflation, for 2026.
• Management expects to implement approximately $500 million of selling price increases in 2026 compared to pre-conflict expectations.

Business Segments and Product Lines:

• Advanced Materials: Sales revenue increased 5% to $762 million in Q3 2026, driven by a 4% increase in selling prices and 1% favorable foreign currency exchange rates. EBIT increased due to improved asset utilization and lower planned maintenance costs.
• Additives & Functional Products: Sales revenue increased 9% to $784 million in Q3 2026, driven by a 10% increase in selling prices, partially offset by a 1% decrease in sales volume/mix. EBIT increased due to improvements in price-cost and asset utilization.
• Chemical Intermediates: Sales revenue increased 16% to $580 million in Q3 2026, driven by a 12% increase in selling prices and a 4% increase in sales volume/mix. EBIT increased primarily due to higher spreads.
• Fibers: Sales revenue remained unchanged at $255 million in Q3 2026, as a 4% increase in sales volume/mix was offset by a 4% decrease in selling prices. EBIT decreased due to lower acetate tow contract pricing and increased raw material and distribution costs.
• Circular Platform: Reinstatement of a $375 million U.S. Department of Energy (DOE) award was announced to support the continued scale-up of the circular platform, expected to drive significant revenue growth in 2026 and 2027.

Market and Competitive Landscape:

• Higher selling prices across the company were driven by higher raw material and distribution costs and tight market conditions in Chemical Intermediates due to the ongoing conflict in the Middle East.
• Sales volume/mix decreased sequentially due to seasonal declines in key end markets and softening underlying demand in automotive and consumer durables.
• The Middle East conflict has led to higher raw material and distribution costs and increasing interest rates.
• Eastman serves customers in more than 100 countries and employs approximately 13,000 people.

Risks and Challenges:

• Ongoing global macroeconomic uncertainty and the escalation of the Middle East conflict present challenges.
• Input costs continued to elevate, impacting margins.
• Softening underlying demand in automotive and consumer durables end markets.
• Forward-looking statements are subject to risks and uncertainties, including supply and demand, capacity, utilization, and market conditions, which could cause actual results to differ materially.

Management Commentary and Tone:

• Mark Costa, Board Chair and CEO, stated that Eastman delivered solid results amid global macroeconomic uncertainty and the Middle East conflict.
• Management emphasized commercial discipline in Advanced Materials, noting that improved selling prices substantially offset higher raw material and distribution costs.
• The company remains confident in the circular platform and positioned for solid revenue growth.
• Management highlighted the importance of operating cash flow in the dynamic environment.
• The tone reflects confidence in the innovation-driven growth model and the ability to deliver solid earnings growth in an uncertain environment.

Other Key Points:

• The company returned $96 million to stockholders through dividends in Q3 2026.
• Priorities for uses of available cash for 2026 include payment of the quarterly dividend, capital expenditures, and maintaining a solid investment-grade balance sheet.
• Eastman will host a conference call with industry analysts on October 30, 2026, at 8:00 a.m. Eastern Time.
• The company had 2025 revenue of approximately $8.8 billion.
• Adjusted EBIT margins for Q3 2026 were 13.5% for Advanced Materials, 19.6% for Additives & Functional Products, 6.0% for Chemical Intermediates, and 20.4% for Fibers.
• Non-GAAP financial measures used include adjusted EBIT, adjusted EBIT margin, and adjusted earnings per diluted share.