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Eastman Chemical's CEO Discusses Q1 2012 Results - Earnings Call Transcript

In addition, we said we expect to close the Solutia acquisition by midyear 2012, and we remain on track to do just that. And we guided full year 2012 EPS to be approximately $5 and that the pension accounting change would add approximately $0.30 per share, so we are confirming our full year EPS guidance, and I'll talk more about that in a few minutes.

Moving to Slide 4. As I mentioned, last night we reported EPS of $1.22. Revenue increased 4%, primarily reflecting higher selling prices. Operating earnings declined year-over-year in each of the segments, except Fibers, and we increased our spending in Other as we continue to fund organic growth initiatives such as Perennial Wood. Sequentially, operating earnings increased by almost $100 million, reflecting a nice bounce back from the challenging fourth quarter business environment and seasonally stronger sales volume, which increased 8% sequentially.

Now to the segments, starting with CASPI on Slide 5. CASPI began 2012 with a strong quarter. Operating earnings were $98 million, down somewhat from first quarter '11 as there were some pre-buying in the polymers product lines in the year ago quarter, but up about $40 million from the fourth quarter, helped by seasonally higher sales volume, which increased 12% sequentially. Looking at our expectations for full year 2012, all of CASPI's main product lines are operating at high levels. They're also benefiting from the Regalite hydrocarbon resin expansion completed during fourth quarter 2011.

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