It came as a surprise to me when Eastman Chemical's (NYSE: EMN) third-quarter net income slipped at a time when chemical players are rocking the Street with outstanding results.

Just a few days ago, I wrote about how things are looking good for Eastman. But its third-quarter numbers might portray a somewhat different picture.

I became curious, and thought of digging a little deeper to know what the company has been up to. And believe me, the numbers won't look as bad once you know the full story.

What hurt the bottom line?
When volumes remained flat, what exactly drove up Eastman's revenues by 20% from the year-ago quarter to $1.8 billion? Higher prices, of course. And this wasn't surprising at all, considering how most chemical players have been witnessing a similar trend lately.

Volumes in DuPont's (NYSE: DD) largest segment also dipped, but higher prices resulted in its third-quarter sales growing by a good 32% from last year. The largest chemical maker, Dow Chemical (NYSE: DOW), saw third-quarter volumes flat, too. But broad-based higher prices pushed its revenues by 17% from the year-ago quarter to $15.1 billion. Higher selling prices were also the primary reason behind Huntsman's (NYSE: HUN) 24% growth in its third-quarter revenues.

Sadly, costs -- primarily relating to outages, restructuring, and acquisitions -- were too high to boost Eastman's bottom line. Its net income thus slipped 2.9% to $165 million.

Charging ahead!
Eastman is furiously gobbling up companies to satisfy its hunger for growth. It acquired three companies in the last quarter.

One was petrochemical producer Sterling Chemicals, acquired in August. Eastman will use these acquired assets to restart its idle plasticizer manufacturing facility and add to existing capacity.

Eastman's strong focus on its plasticizer business is also evident from its capacity expansions at its other plasticizer sites. Its recent acquisition of Scandiflex, a Brazil-based plasticizer company, strengthens the argument further. This also highlights how keen Eastman is to gain traction in fast-growing emerging markets. Around 53% of Eastman's third-quarter earnings were from Asia, Europe, and Latin America combined.

These markets have caught the eye of peers as well. Huntsman, for instance, acquired an India-based chemical company, Laffans Petrochemicals, this year, and is planning major expansions in the country. Celanese (NYSE: CE) also derives a lot of revenue from markets like Asia and has been expanding its capacity there to meet the rising demand. This seems to be a sure-shot way to boost revenues, given how some of the biggest companies have been making the most of these growing regions.

Apart from the above additions to its largest performance chemicals segment, Eastman has made some other value business additions as well. It acquired Dynaloy, an Indiana-based specialty chemical business, to strengthen its electronics materials product line. And more recently, Eastman has added a renewable chemicals developer, TetraVitae Bioscience, that will help it deliver more effective and sustainable solutions to its customers.

The Foolish bottom line
Eastman's aggressive investment in expansions is indeed praise-worthy. A lot of capacity additions will keep it rolling. What's important to remember is that its revenue growth is strong. The company has also raised its quarterly dividend by 11% (current yield is 2.7%). I strongly feel this stock's worth a watch.

To stay updated on Eastman as it expands and acquires, make sure you add it to our watchlist service, My Watchlist. It's free, and it helps you constantly stay updated on news and analysis on your favorite companies.