Eastman to divest PET business; reports 39 per cent jump in revenues

The chemicals, fibres and plastics manufacturer Eastman Chemical Company is reviewing strategic options for its polyethylene terephthalate (PET) business in the Performance Polymers segment, including a possible divestiture, the company said in a statement yesterday.

The Kingsport, Tennessee-based company has appointed Bank of America Merrill Lynch as its exclusive financial advisor for the strategic review.

The PET business comprises about 81 per cent of the performance-polymers unit's revenue, the company said in a presentation.
Eastman has already sold its PET businesses in Europe and Latin America.

Meanwhile, the company has announced better-than-expected first quarter net income of $101 million, or $1.37 per share, compared with just $2 million, or 3 cents per share, in the year-ago period. Excluding restructuring charges of $26 million, first-quarter 2009 earnings were $0.25 per diluted share.

Sales revenue for first quarter 2010 was $1.6 billion, a 39 per cent increase compared with first quarter 2009 primarily due to higher sales volume, a favorable shift in product mix, and higher selling prices.

The higher sales volume was due primarily to improved customer demand compared with the depressed levels in first quarter 2009 and the increase in selling prices was in response to higher raw material and energy costs.