Earnings Analysis for EMN
Revenue Analysis
Total and Operating Revenue: EMN’s total revenue has fluctuated over the period, with a peak in Q2 2023 at $2.41 billion, and a low in Q4 2023 at $2.20 billion. Operating revenue aligns closely with total revenue, indicating a stable core business operation.
Gross Profit Margins: Gross profit has shown a general upward trend from $484 million in Q3 2023 to $532 million in Q1 2024, demonstrating improved efficiency or pricing strategies in generating revenue from the cost of goods sold.
Cost Management
Cost of Revenue: Cost of revenue has been relatively stable, averaging around $1.76 billion over the periods reviewed. This reflects stable production costs or sourcing strategies.
Operating Expense: Operating expense peaked at $250 million in Q1 2023 and saw some variations with a reduction to $245 million by Q1 2024, suggesting some level of cost control or operational adjustments.
Total Expenses: Total expenses have generally been aligned with revenue trends, with significant expenses recorded in Q1 2023 at $2.13 billion and a decrease thereafter.
Profitability Analysis
EBITDA: EBITDA was highest in Q4 2023 at $597 million. However, it saw a reduction to $410 million by Q1 2024.
Operating Income: Operating income has experienced fluctuations, peaking at $342 million in Q2 2023, with a reduction to $287 million in Q1 2024, perhaps due to increasing operating expenses or reduced margins.
Pretax Income: Pretax income also shows significant variability, peaking at $425 million in Q4 2023 and declining to $214 million by Q1 2024.
Net Income: Net income mirrors these trends, with a high of $310 million in Q4 2023 and a lower figure of $165 million in Q1 2024, indicating the influence of tax provisions and interest expenses.
Cash Flow Indicators
Reconciled Depreciation: Depreciation expenses have been relatively stable, demonstrating consistent capital expenditure and asset utilization across the periods.
Interest Expense: Interest expenses were fairly consistent, suggesting stable debt levels and financing costs.
Taxation
Tax Rate: EMN’s effective tax rate has varied, with a notable increase in Q1 2023 to 0.31 and a decrease to 0.23 by Q1 2024.
Tax Provision: The tax provision increased substantially in Q4 2023 to $114 million before reducing to $49 million in Q1 2024.
Tax Effect of Unusual Items: This was particularly significant in Q1 2024 at around -$3.68 million affecting the taxation of various exceptional items.
Shareholder Metrics
Diluted and Basic EPS: Earnings Per Share has shown volatility; the diluted EPS ranged from a high of 2.61 in Q4 2023 to a low of 1.39 in Q1 2024. Basic EPS followed a similar trend.
Average Shares: There has been a slight decrease in both diluted and basic average shares, indicating possible share buybacks or other capital return strategies.
Net Income Available to Common Stockholders: This metric has mirrored the net income trends, with high figures in Q4 2023 and lower figures as of Q1 2024.
Conclusion
EMN has experienced notable fluctuations in its financial performance across several metrics. While revenue has remained fairly stable, profitability has seen significant variance due to cost management challenges and varying tax impacts. The company may need to focus on enhancing operational efficiencies and maintaining cost controls to bolster its financial base further. Strategic reviews in investment in assets and capital management could also benefit shareholder value in the long term.