Eastman Chemical reported higher third-quarter sales and earnings, with pricing gains helping offset elevated raw-material and distribution costs. The company also highlighted a reinstated $375 million U.S. Department of Energy award for its circular platform, ongoing cost-reduction efforts and expectations for working-capital cash inflows in the fourth quarter.
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Third-quarter results: Sales revenue rose 8% year over year to $2.385 billion. EBIT was $305 million, compared with $188 million a year earlier; adjusted EBIT was $305 million, versus $210 million. Diluted earnings per share increased to $2.19 from $0.60, while adjusted diluted EPS rose to $1.84 from $1.14.
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Pricing drove most of the sales increase: Selling prices were up 7% from a year earlier, while sales volume and mix increased 1%. Eastman said higher prices reflected higher input and distribution costs, as well as tight conditions in Chemical Intermediates amid the Middle East conflict.
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Sequential demand was softer: Despite the year-over-year increase in volume and mix, those measures declined from the second quarter. Eastman attributed the sequential drop to seasonal weakness across key end markets and softer underlying demand in automotive and consumer durables.
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Business performance varied by segment: Additives & Functional Products showed resilience in a challenging environment. In Advanced Materials, improved selling prices substantially offset higher raw-material and distribution costs. Fibers remained on track for expected second-half volume growth as customers meet annual contract commitments.
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Pricing and cost plans: CEO Mark Costa said Eastman remained on track to implement approximately $500 million of selling-price increases in 2026 compared with expectations before the Middle East conflict began. The company also reiterated its goal of delivering $125 million to $150 million in cost savings this year, net of inflation.
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Circular-platform support: Eastman said a $375 million Department of Energy award supporting the continued scale-up of its circular platform had been reinstated. The company said it was on track for significant revenue growth from the platform in 2026 and 2027.
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Cash generation: Operating cash flow was $290 million in the third quarter, compared with $402 million a year earlier. For the first nine months of 2026, it totaled $377 million. Eastman said it expected to release working capital in the fourth quarter.
The results show that higher pricing supported year-over-year revenue and earnings even as costs remained elevated. The company’s stated near-term priorities include further pricing actions, cost savings and cash generation, alongside growth in its circular platform.