OM Group, Inc. (OMG), a manufacturer of specialty chemicals and advanced materials Thursday said it slipped to fourth-quarter loss from a profit in the same quarter a year ago, hurt by one-time charges as well as a decline in revenues.
Cleveland, Ohio-based OM Group's net loss for the fourth quarter was $32.715 million or $1.08 per share, compared to net income of $47.987 million or $1.58 per share in the same quarter a year ago.
On average, three analysts polled by Thomson Reuters expected fourth-quarter earnings of $0.01 per share. Analysts' estimate typically excludes special items such as one-time charges and expenses.
Third quarter results were negatively impacted by a non-cash inventory charge of $0.63 per diluted share, and a non-cash goodwill impairment charge of $0.29 per diluted share.
Loss from continuing operations for the fourth quarter was $33.018 million or $1.09 per share, compared to income from continuing operations of $46.441 million or $1.53 per share in the same quarter last year.
Income from discontinued operations for the fourth quarter decreased to $303 thousand or $0.01 per share from $1.546 million or $0.05 per share in the fourth quarter of last year.
Operating loss for the quarter was $45.950 million, compared to an operating income of $55.452 million in the corresponding quarter a year ago.
Goodwill impairment charges for the fourth came in at $8.800 million, while there was no such charge in the year-ago quarter. Selling general and administrative expenses for the fourth quarter increased to $40.748 million from $28.733 million in the same quarter last year. The company also met with a foreign exchange loss of $4.613 million, compared to a foreign exchange gain of $2.138 million in the same quarter a year ago. Fourth quarter results also included other losses of $1.348 million, compared to other gain of $550 thousand in the year-ago quarter.
Fourth-quarter net sales dropped to $296.599 million from $309.367 million in the same quarter last year, negatively impacted by a decline in sales from advance material segment.Net sales for the Advanced Materials segment for the fourth quarter decreased to $194.1 million from $222.3 million in the fourth quarter of last year, hurt by a decline in sales volume of metal resale, a decline in product selling prices resulting from a decrease in the reference price for cobalt. The decline in sales were also negatievley impacted by a decline in overall volume.
Excluding metal resale and copper by-product sales, fourth quarter volume was down 4 % from the ago quarter.
Net sales from the Specialty Chemicals segment, however, increased to $102.7 million in the fourth quarter from $87.2 million in the same quarter last year, driven by acquisitions and higher selling prices in Advanced Organics, partially offset by lower volumes.
For the full year, net income decreased to $135.003 million or $4.45 per share from $246.866 million or $8.15 per share a year ago. The Street estimated earnings of $4.78 per share for the full year 2008.
Revenues for the full year 2008 increased to $1.736 billion from $1.021 billion last year.
Looking forward for the year ahead, the company said it didn't expect an immediate recovery from the prevalent uncertainty and weak end-market demand created in the fourth quarter of 2008. The company, however, expect cobalt prices to remain lower on a year-over-year basis.
Joseph M. Scaminace, Chairman and Chief Executive Officer also noted that the economic outlook for the year ahead is uncertain as the company is implementing additional cost containment measures to further leverage margin growth and profitability, including elimination of 2009 salary increases where possible, reduction in headcount, reprioritization of capital projects and cutting discretionary spending.
OMG is currently trading at $16.49, down $0.79 or 4.57% on a volume of 741k shares on the NYSE.
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