Eastman Chemical Shares Skyrocket on First-Quarter Adjusted Earnings Beat

Eastman Chemical ( EMN) said Thursday that its first-quarter profit fell a whopping 98%, but its adjusted earnings still beat analyst estimates and sent the company's shares soaring.

The Kingsport, Tenn., company reported fiscal first-quarter net income of $2 million or 3 cents per share, down 98% from $133 million or $1.68 per share in the year-ago period. These results were hurt by one-time items, including restructuring charges.

Excluding these and other one-time items, the company earned 25 cents per share, enough to beat the average Wall Street analyst estimate of 14 cents per share. Sales for the quarter dropped 35% percent to $1.13 billion, well shy of the average analyst forecast of $1.33 billion.

Eastman also reaffirmed its full-year 2009 profit forecast of $2 to $3 per share. On average, Wall Street analysts expect $2.29 per share. Eastman shares rose $7 or 20% on the heels of the report in late morning trading Friday.

We removed Eastman from our "Recommended" list back on Sept. 4 when the stock was trading at $57.56. The company has a 5.32% dividend yield based on Friday's closing stock price of $33.11.

The stock has technical support in the $31 to $33 price area. If the shares can continue today's run-up, we see overhead resistance in the $42 to $46 price area. We would remain on the sidelines for now. Eastman holds a Dividend.com DARS Rating of 3.1 out of 5 stars.

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