Sales down at Eastman, Chemours

Aug 20, 2023

Materials makers Eastman Chemical Co. and Chemours Co. each reported lower second-quarter sales, with Chemours showing a sizable financial loss as well. A composites supplier, however, has bucked the downward trend.

Sales for the quarter at Kingsport, Tenn.-based Eastman were down 18 percent to $2.3 billion, even as profit was up 6 percent to $272 million. Eastman's Advanced Materials unit — including Tritan-brand copolyester — saw quarterly sales decline 13 percent to $739 million, with pretax profit down 30 percent to $99 million.

In a news release, Eastman CEO and Chairman Mark Costa said that, looking to the second half, his firm "continues to expect auto, aviation, and other markets to modestly improve … [but] we have reduced our demand growth outlook and therefore now expect primary demand across many of our end markets to be stable compared with the first half."

Chemours of Wilmington, Del., saw second-quarter sales fall 16 percent to $1.6 billion as the firm posted a $376 million loss. Chemours also announced it was closing a plant in Taiwan that makes titanium dioxide, a common plastics whitener. Other plastics-related products made by Chemours include fluoropolymers and fluoroelastomers.

Sales at Chemours' Advanced Performance Materials unit were down 3.5 percent for the quarter to $387 million, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) down 24 percent to $81 million. The firm's Titanium Technologies unit also saw challenging conditions, with sales down 27 percent to $707 million and adjusted EBITDA plunging 60 percent to $87 million.

The Kuan Yin TiO2 plant in Taiwan will close on Aug. 1. Officials said the closing will provide annual savings of $50 million beginning in 2024.

CEO and President Mark Newman said in a news release that because of "the low visibility in certain order books" and increasing uncertainties in the second half of the year, Chemours is lowering its guidance for the remainder of 2023.

Composites maker Hexcel Corp., however, saw slightly different conditions in the second quarter, with sales up 15.5 percent to $454 million, even as profit declined 5 percent to $42.5 million.

In a news release, Chairman, President and CEO Nick Stanage said that global demand for Hexcel's lightweight composite materials "continues to be robust, and our focus remains on staying agile and aligned with our customers to meet their requirements." Strong demand is leading Hexcel to increase its guidance for the rest of the year, he added.

In May, Hexcel completed an expansion of its production site in Morocco and purchased a facility in Amesbury, Mass., where it had been operating since 2019. Products made by Hexcel include carbon fiber, woven reinforcements, resins, prepregs, honeycomb and additive manufactured parts.

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