Thursday, specialty chemicals and materials company Cytec Industries Inc.(CYT) reported a swing to loss in the second quarter, primarily on lower sales and charges related to various restructuring initiatives across Specialty Chemicals, Engineered Materials, and Corporate operations. The company, however, maintained its adjusted earnings forecast for the full year 2009.
The Woodland Park, New Jersey-based company posted a second quarter net loss of $24.8 million or $0.52 per share, compared to net earnings of $56.5 million or $1.16 per share in the prior year period.
Second quarter results included pre-tax charge of $34.2 million or $22.8 million after-tax or $0.48 per share, pertaining to various restructuring initiatives across Specialty Chemicals, Engineered Materials, and Corporate operations. The company also incurred pre-tax loss of $1.4 million after-tax or $0.03 per share cost related to the exit of the polyurethane product line in Asia. Special items totaled $24.2 million after-tax or $0.51 per share for the second quarter.
Excluding special items, net loss for the quarter was $0.6 million or $0.01 per share, compared to net earnings of $58.5 million or $1.20 per share a year before.
On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.
The company said its earnings and margins were adversely affected as it operated almost all of its plants at reduced rates due to weak demand, and by aggressive destocking actions.
Net sales for the quarter declined to $0.68 billion from $1.01 billion a year ago. Analysts expected the company to report revenues of $660.33 million.
Shane Fleming, Chairman, President and Chief Executive Officer said, "Sales declined across all specialty chemicals segments in the second quarter compared with the prior year due to the weak economy compounded by customer destocking activity."
Cytec Coating Resins sales decreased 38% to $295 million, while Cytec Additive Technologies sales decreased 30% to $63 million from previous year. Cytec In Process Separation sales decreased 23% to $58 million and Cytec Engineered Materials sales decreased 21% to $178 million. Cytec Building Block Chemicals sales decreased 34% to $91 million from last year.
For the first six months of the year, the company reported a net loss of $24.9 million or $0.52 per share, compared to net earnings of $105.7 million or $2.17 per share in the year ago period.
Net sales for the six-month period plunged to $1.30 billion from $1.98 billion a year earlier.
Looking ahead to fiscal year 2009, the company said it continues to expect adjusted earnings in the range of $0.60 to $0.90 per share. Street analysts currently expect earnings of $0.69 per share for the full year.
CYT closed Thursday's regular trading at $20.45, up $0.40 or 2.00%, on the NYSE.
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