A global specialty materials company spun off from Eastman Kodak in 1994. Founder George Eastman built its chemical arm in Kingsport, Tennessee in 1920 to keep his film business supplied during World War I, distilling chemicals from Appalachian hardwood forests. Today it makes everyday materials from Tritan™ drinkware plastics to Saflex™ windshield layers and Naia™ renewable yarns, and it operates the world's largest polyester molecular-recycling facility.
Q2 2026 revenue rose 9.9% to $2.513B and operating income rose 51.5% to $256M
The swung from loss to growth this quarter. rose 9.9% to $2,513M and rose 32.5% to $1.59 as CI sales rose 39% on olefin supply tightness, while was 22.3% and rose 51.5% to $256M. The quarter reverses the prior-year decline but first-half is still down 11%.
Key takeaways
sales rose 39% in Q2 on olefin supply tightness, helping total rise 9.9% to $2,513M and rise 16% to $320M.
rose 51.5% to $256M and rose 32.5% to $1.59 , with at 22.3%, up 0.2 points.
dropped 56% in Q2 and 52% in the first half, driven by lower volume from customer destocking and weaker textiles demand.
Section summaries
Management's Discussion and Analysis
Q2 2026 sales rose 10% to $2.5B on higher volume and CI pricing; adjusted EBIT up 16% but first-half adjusted EBIT fell 11%.
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Second-quarter sales grew 10% to $2,513 million, driven by higher volume/mix (+$111M) and higher selling prices (+$87M), with CI sales surging 39% on olefin supply tightness.
improved to $87M in H1 2026 from $66M a year earlier, aided by lower variable compensation payouts and reduced outflows.
rose to $4,526M at June 30, 2026 after a $600M notes issuance; no share repurchases were made in the first half.
What changed
Q2 2026 reversed the Q1 $18M loss and Q2 2025 $30M loss as sales rose 39% on olefin supply tightness.
Q2 2026 decline of 56% continued the weakness flagged from Q1 (49% drop) and Q1 2025 (25% drop) on destocking.
H1 2026 improved to $87M from $66M in H1 2025, against the ~$400M full-year guide after Q1 used $137M.
No disclosure appeared in this 10-Q; the carrying value and critical audit matter carry from the 2025 10-K.
rose 15.4% sequentially from $2,177M in Q1 2026, ending two straight quarters of declines that ran through Q1 2026.
What to watch
Q3 2026 to see if the 39% sales gain and positive swing holds as olefin supply tightness eases
Q3 2026 sales and to see if the 56% Q2 EBIT drop normalizes as destocking fades
Full-year 2026 against the ~$400M guide with H1 cash at $87M
Year-end 2026 disclosure given the $2.2B carrying value and continuing critical audit matter
increased 16% in Q2 to $320 million, benefiting from higher selling prices and cost reduction initiatives, partially offset by higher SG&A and planned maintenance.
First-half declined 11% to $520 million, pressured by lower sales volume/mix, lower selling prices, higher raw material/energy costs, and increased SG&A.
dropped 56% in Q2 and 52% in the first half, driven by lower volume from customer destocking and weaker textiles demand.
improved to $87 million in H1 2026 from $66 million, aided by lower variable compensation payouts and reduced outflows.
rose to $4,526 million at June 30, 2026, following a $600 million notes issuance; no share repurchases were made in the first half.
Quantitative and Qualitative Disclosures About Market Risk
Eastman has exposure to various market risks principally due to changes in foreign currency exchange rates, the pricing of various commodities, and interest rates. In an effort to manage these risks, the Company employs various strategies, including pricing, inventory management…
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Eastman has exposure to various market risks principally due to changes in foreign currency exchange rates, the pricing of various commodities, and interest rates. In an effort to manage these risks, the Company employs various strategies, including pricing, inventory management, and hedging. The Company enters into derivative contracts which are governed by policies, procedures, and internal processes set forth by its Board of Directors.
The Company determines its exposures to market risk by utilizing sensitivity analyses, which measure the potential losses in fair value resulting from one or more selected hypothetical changes in foreign currency exchange rates, commodity prices, or interest rates. For more information regarding exposures, refer to Part II, Item 7A of the Company's 2025 Annual Report on Form 10-K.
At June 30, 2026, the market risk associated with certain cash flows under foreign currency derivative transactions assuming a 10 percent adverse move in the U.S. dollar relative to these foreign currencies was $33 million, with an additional $3 million exposure for each additional one percentage point adverse change in those foreign currency rates. Since the Company utilizes currency-sensitive derivative instruments for hedging anticipated foreign currency transactions, a loss in fair value from those instruments is generally offset by an increase in the value of the underlying anticipated transactions.
Other than the foreign currency risk discussed above, there have been no material changes to the Company's market risks from those disclosed in Part II, Item 7A of the Company's 2025 Annual Report on Form 10-K.
Eastman states no pending matters are expected to materially affect its financial condition, results, or cash flows.
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Eastman is party to ordinary-course lawsuits including product liability, asbestos, environmental, and antitrust matters.
The Company believes no currently pending matter will have a material adverse effect on its overall financial condition, results of operations, or cash flows.
For environmental proceedings involving a governmental authority, Eastman's disclosure threshold is potential monetary sanctions of $1 million or more.
, a wholly-owned subsidiary, is a defendant in that have been submitted to Monsanto (now Bayer AG) for defense and .
If claims are not covered as under the , could potentially be liable.
For information regarding the Company's material known risk factors which could materially adversely affect the Company, its business, financial condition, or results of operations, see "Risk Factors" in Part I, Item 1A of the Company's 2025 Annual Report on Form 10-K.
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For information regarding the Company's material known risk factors which could materially adversely affect the Company, its business, financial condition, or results of operations, see "Risk Factors" in Part I, Item 1A of the Company's 2025 Annual Report on Form 10-K.