Eastman Chemical Company (EMN) announced that its Saflex S-series solar absorbing polyvinyl butyral (PVB) interlayer has received the Seal of Recommendation from the Skin Cancer Foundation. One of the primary conditions to receive the Seal of Recommendation is that Saflex S series interlayer products block about 99% of ultraviolet A (UVA) and ultraviolet B (UVB) radiation.
As per the Skin Care Foundation, Saflex S series PVB offers options that are recognized worldwide and can prevent UVA exposure. The Skin Care Foundation reported about 3.5 million skin cancers in over two million people annually in the U.S. The Foundation also mentioned that one person dies every hour in the U.S. due to a dangerous form of skin cancer called melanoma and one in five Americans is found to have skin cancer in the course of a lifetime. The Foundation also pointed that most non-laminated, tempered automotive windows are proven to block UVB, but transmit more than 60% of the sun's UVA.
Most of the automotives use single pane tempered glass these days, which transmits significant amounts of UVA and generally people develop cancer on their left side of the face due to extended UVA exposure through the side window. Saflex S is also available in acoustic version, Saflex Q Series Solar and both can be used in glazing applications including the windscreen, sunroof, rear and side glass. They prevent and block harmful rays and also reduce noise that enters the vehicle through the glass.
Eastman is a global specialty chemicals company and in July 2012, it took over Missouri-based chemical company Solutia under a cash and stock deal worth roughly $4.8 billion (including Solutia debt). The acquisition is expected to significantly accelerate the company's growth and offer lucrative opportunities in Asia-Pacific.
Hefty costs associated with the takeover dragged down Eastman's profit in the second quarter of 2012. The company reported earnings (from continuing operations) of $1.26 per share in the quarter, down 17% from $1.51 a year ago.
Excluding costs related to the acquisition of Solutia Inc. and a one-time gain, the Tennessee-based chemicals maker earned $1.40 a share, which outperformed the Zacks Consensus Estimate of $1.34. Profit (as reported) from continuing operations dropped 19% to $177 million.
Eastman Chemical continues to expect double-digit earnings growth in 2012 due to the acquisition of Solutia. The company retained its adjusted earnings forecast of $5.30 a share for the year, which is higher than the current Zacks Consensus Estimate of $5.20.
We believe that Eastman Chemical is well positioned to benefit from the synergies of its Solutia acquisition in second-half 2012. The company also stands to benefit from business restructuring, cost-cutting measures and increased capacity additions.
The company, which competes with The Dow Chemical Company (DOW) and E. I. du Pont de Nemours and Company (DD), holds a short-term Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.