Wednesday, Biocides company Arch Chemicals, Inc. (ARJ) reported a decline in second-quarter earnings, as lower volumes and unfavorable foreign exchange more than offset higher pricing and the favorable impact of the Advantis acquisition. The company also lowered its earnings forecast for fiscal 2009 to a range below Street view.
Net income for the quarter declined to $30.9 million from $33.2 million in the corresponding period last year. Earnings per share declined to $1.23 from $1.33 per share in the year-ago quarter. Results for the just-ended quarter include an income tax benefit of $1.3 million, or $0.05 per share.
Analysts polled by Thomson Reuters expected the company to earn $1.19 per share. Analysts' estimates typically exclude special items.
Quarterly sales declined to $414.2 million from $469.6 million in the same period last year. Two analysts expected the company to report sales of $441.95 million for the quarter.
Total Treatment Products business sales declined to $375.9 million from $411.4 million in the year-ago period. HTH Water Products sales increased to $202.5 million from $191.6 million in the prior-year period, and operating income increased 6% from the year-ago period, principally due to positive contribution from Advantis acquisition. Wood Protection and Industrial Coating sales slid to $99.9 million from $132.2 million in the same period last year.
Total Performance Products business sales fell to $38.3 million from $58.2 million in the year-ago period. Performance Urethanes revenue declined to $34.3 million from $32.8 million in the corresponding period last year.
Commenting on the company's second quarter 2009 results, Arch Chemicals' chairman, president and chief executive officer Michael Campbell said, "We also benefited from reduced raw material costs in our performance urethanes business, while significant cost-reduction measures helped temper continued depressed sales in the wood protection and industrial coatings businesses. Cost reductions will continue to be an urgent focus in all businesses."
Looking ahead, for the third quarter, the company anticipates earnings per share from continuing operations to be in the $0.25 to $0.35 per share range. Currently, analysts expect the company to earn $0.41 per share for the third quarter.
For 2009, the company slashed its earnings forecast to $1.60 to $1.80 per share from earlier guidance of $1.85 to $2.05 per share. Full-year sales are now expected to be approximately 5%to 7% lower than 2008. For 2008, the company reported sales of $1.49 billion. Currently, analysts expect the company to earn $1.88 per share on revenues of $1.42 billion for 2009.
The company attributed the lowered 2009 earnings guidance to lower demand principally due to unseasonal weather patterns in North America as well as decreased demand for biocides used in industrial applications and for performance urethanes products.
ARJ is currently down $0.64 or 2.44% and trades at $25.61.
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