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Olin Q4 Profit Up 85% On Revenue Growth, Lower Restructuring Charges

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Olin Corp. (OLN: Quote), a maker of chlor alkali products, on Monday reported an 85 percent surge in profit for the fourth quarter, reflecting strong revenue growth and lower restructuring charges. Both earnings per share and revenue beat analysts' estimates. Looking ahead, the company forecast earnings for the first quarter below analysts' expectations.

Chlor Alkali Products sales for the fourth quarter were almost flat with the year-ago period at $323.1 million. Olin noted that the Chlor Alkali business experienced seasonally weak demand, which improved late in the quarter.

Winchester sales increased 27 percent to $155.8 million, reflecting increased shipments to commercial, military and law enforcement customers. Chemical Distribution sales for the quarter were $108.7 million, primarily reflecting caustic soda sales.

Clayton, Missouri-based Olin's net income for the fourth quarter was $34.6 million or $0.43 per share, up from $18.7 million or $0.23 per share in the year-ago period. On average, analysts polled by Thomson Reuters expected the company to earn $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

The latest quarter's results include pretax restructuring charges of $2.5 million, compared to restructuring charges of $4.1 million in the year-ago period. In addition, results include a $4.9 million insurance recovery related to an unplanned first and second quarter Chlor Alkali customer outage, and a $3.0 million favorable settlement of a property tax dispute.

Net sales for the quarter rose 32 percent to $587.6 million from $445.8 million in the prior-year period. Analysts had a consensus revenue estimate of $546.61 million.

For fiscal 2012, Olin's net income declined to $149.6 million or $1.85 per share from $241.7 million or $2.99 per share in the previous year. However, net sales for the year rose 11 percent to $2.18 billion from $1.96 billion in the prior year.

Analysts expected the company to report earnings of $1.77 per share for the year on revenues of $2.14 billion.

Looking ahead to the first quarter of fiscal 2013, Olin forecasts net income in a range of $0.40 to $0.45 per share. Analysts expect the company to earn $0.56 per share for the quarter.

The quarter's results are expected to include restructuring charges of about $3.5 million.

The company projects Chlor Alkali earnings for the first quarter to decline due to lower volumes and pricing. Meanwhile, earnings for Winchester are expected to significantly exceed prior-year quarter's results as commercial volumes are projected to remain at elevated levels.

On January 25, Olin's board of directors declared a dividend of $0.20 on each share of Olin common stock. The dividend is payable on March 11 to shareholders of record at the close of business on February 11.

OLN closed Monday's trading at $23.93, up $0.68 or 2.92 percent on a volume of 1.57 million shares. In after-hours, the stock further gained $0.07 or 0.29 percent to $24.00.

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by RTT Staff Writer

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