Eastman Chemical Company Q1 FY2026 earnings call

• Renew platform: Excited about revenue growth in specialty and RPET, with wins in Triton and cosmetic packaging. RPET benefits from virgin PET price increase.
• Chemical intermediates: More volume to sell in North America with expanding spreads, and export margins improved due to Middle East shortage.
• Fibers: Reduced customer shipments in Q1, but second half expected improvement due to contract commitments and potential volume ramp up.
• Advanced materials: Sequential price increases, volume growth from application wins, and pricing to cover raw material costs.

Renew platform (methanolysis) has revenue growth. Specialty side sees wins, RPET benefits from virgin PET price increase. Chemical intermediates have more volume to sell with margin benefits. Fibers have reduced customer shipments but second half expected improvement. Advanced materials has volume growth, pricing actions to cover raw material costs.

• Q2 EBIT expected around $50M. Q3 EBIT expected similar to Q2, depending on Strait situation. Potential volume upside from Middle East issues affecting competitors. Second half of year expected to be better for fibers and advanced materials with contract commitments and cost reductions.

• Middle East conflict impact on market tightness and competitor supply issues.
• Supply chain shortages and inventory depletion affecting market serving.
• Fiber customer shipment risks and potential volume shortfalls.

Q: Vincent Andrews asks about methanolysis opportunity with crude oil and virgin plastic price run-up.

A: Renew platform has revenue growth, specialty side has wins, RPET benefits from price relative to virgin PET. Potential volume upside from Middle East issues.

Q: Patrick Cunningham asks about volume upside and fibers.

A: Chemical intermediates have more volume to sell, fibers have reduced shipments but second half expected improvement from contract commitments.

Q: David Begleiter asks about CI EBIT in Q3.

A: Q3 EBIT expected similar to Q2, depending on Strait situation and market tightness.

Q: Josh Spector asks about demand pull forward.

A: Underlying demand assumption similar to last year, order books strong but June a wild card.

Q: Frank Mitch asks about price increases.

A: Chemical intermediates have high teens price increases, specialties have mid-single-digit, competitors facing cost pressure.

Q: Matthew Deo asks about IEPA tariff refunds.

A: IEPA refund recognized in Q1, neutralizing winter storm impact, cash expected in second half.

Q: Jeff Sikowskis asks about advanced materials earnings and CI asset utilization.

A: Advanced materials earnings per share above $6, CI margin growth in olefins, inventory built in Q1 limits Acetyl upside.

Q: John Roberts asks about automotive performance.

A: No difference in coatings and films, both affected by discretionary consumer behavior.

Q: Aaron Visvanathan asks about CI supply and demand.

A: Potential capacity rationalization in Europe, Japan, S. Korea due to cost pressure. High oil/gas prices likely to persist.

Q: Lawrence Alexander asks about working capital and shortages.

A: Working capital impact on free cash flow, shortages likely in Southeast Asia, customers not reporting immediate shutdowns yet