Maintains 2025 EPS Guidance Amid Tariff Uncertainty; Targets $1B Cash Flow, $200M Inventory Cut, And Q3 EPS of ~$1.25

2025 Outlook

Commenting on the outlook for full-year 2025, Costa said: "As we have entered the second half of the year, we are encountering a global macroeconomic environment that remains challenging. Customer caution is intensifying due to a changing tariff landscape and weak underlying demand. With this, we are taking decisive actions to control costs, manage working capital, and drive our circular economy platform forward in a disciplined manner. Considering the wide range of potential outcomes due to increased tariff levels and related uncertainty, the company is maintaining its approach of providing quarterly adjusted earnings per share guidance. We are expecting a decline in volume due to trade dispute impacts and normal seasonality. In this context, we are increasing our focus on generating cash. We are executing plans to reduce inventory by greater than $200 million below current levels. This reduction of inventory will come with a $75 million to $100 million asset utilization headwind to earnings in the back half of the year, with around $50 million in the third quarter. Partially offsetting these headwinds is an expected increase in Chemical Intermediates earnings after an unplanned outage in the second quarter. We also expect to benefit from the continued ramp-up of our cost-reduction initiatives and increased revenue from our Kingsport methanolysis facility. When putting these factors together, we project third-quarter adjusted earnings per share to be around $1.25. We expect to generate full-year operating cash flow of ~$1 billion as declines in cash earnings will be partially offset by a release of working capital. We are in a solid financial position in an industry that is going on four years of significant challenges. The actions we are taking today are expected to position the company to be a strong relative performer, now and in the coming years."

The third-quarter 2025 projected adjusted diluted EPS excludes any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS without unreasonable efforts.