Eastman Chemical Falls 21%. It’s the S&P 500’s Worst Stock Today.

Eastman Chemical expects operating cash flow to decline for the second consecutive year in 2025. (Courtesy Eastman Chemical)

Eastman Chemical was the worst performer in the S&P 500 on Friday after reporting worse-than-expected quarterly earnings and a grim outlook for the rest of the year.

The company posted adjusted earnings of $1.60 a share for the second quarter, short of Wall Street’s consensus estimate of $1.73. Revenue totaled $2.29 billion, a tick below analysts’ call for $2.3 billion and down from $2.36 billion the year prior.

Eastman stock was down 21% to $57.10 on Friday. That plunge put the stock on pace for its lowest close since April 24, 2020 and its largest single-day percentage drop on record, according to Dow Jones Market Data.

“We are encountering a global macroeconomic environment that remains challenging,” said CEO Mark Costa. “Customer caution is intensifying due to a changing tariff landscape and weak underlying demand.”

Eastman expects a decline in sales volume in the second half of the year due to seasonal factors and the effects of trade disputes, Costa said. The company said it now expects operating cash flow of around $1 billion, compared with an earlier call for $1.2 billion. Eastman posted operating cash flow of $1.29 billion last year and $1.37 billion in 2023.

Management also forecast adjusted third-quarter earnings of $1.25 a share. The consensus call among analysts tracked by FactSet before the results came out was for $1.91.

Due to the challenging economic conditions, analysts at Mizuho Securities lowered their estimates for Eastman’s earnings from 2025 to 2027. The firm lowered its price target to $80 from $92 but reiterated an Outperform rating.

Write to Nate Wolf at nate.wolf@barrons.com