Specialty chemical manufacturer Albemarle Corp. (ALB) on Wednesday reported a 38% year-over-year drop in profit for the second quarter, hurt by a 28% decline in quarterly sales, despite cost controls initiated amid the global economic slowdown. Adjusted earnings per share for he quarter declined 39%, but topped analysts' expectations bu eight cents, while quarterly revenues decreased, and missed consensus estimate.
In a statement, chairman and chief executive officer, Mark Rohr said, "While the challenging economy continues to affect many of our markets, our second quarter results reflect encouraging progress overall. Cost control and some volume gains resulted in significant sequential improvements in our Polymer Additives segment profitability. Our Catalysts business also reported sequential profit improvement, driven by record performance in our polyolefin catalysts division. While our Fine Chemicals business continued to feel the effects of lower production volumes, we are encouraged by a strong new product pipeline in the second half."
The Baton Rouge, Louisiana-based company reported net income of $38.49 million or $0.42 per share for the second quarter, lower than $61.66 million or $0.67 per share in the prior-year quarter.
The results for the latest quarter primarily include a after-tax charge of $8.2 million or $0.09 per share, related to the disposition of the Port de Bouc, France facility, and a $9.2 million or $0.10 per share of one time gain from the settlement of the 2005-2007 tax audits.
Excluding these special items, adjusted earnings per share for the quarter declined 39% to $0.41 from the year-ago quarter's $0.67. On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter dropped 28% to $445.30 million from $620.75 million in the same quarter last year, and missed seven Wall Street analysts' consensus estimate of $512.15 million.
On a segmental basis, for the second quarter, fine chemicals delivered net sales of $103.98 million, a drop of 32% from $151.86 million in the same quarter last year. Fine Chemicals segment income dropped to $5.2 million from $24.5 million last year, due to lower sales and production volumes.
Polymer Additives net sales was $172.72 million, down 34% from $260.51 million in the year-ago quarter, reflecting continued softness in consumer electronics, automotive and construction sectors. Segment income slid to $14.7 million from $26.5 million last year, due to lower sales and production volumes.
Catalysts net sales for the quarter declined 19% to $168.60 million from the prior-year quarter's $208.39 million, due primarily to lower volumes in FCC refinery catalysts and unfavorable currency exchange rates, partially offset by continued improved pricing. Catalysts segment income was $37.7 million, down 12% from $43.0 million last year.
Operating profit for the second quarter plunged to $30.99 million from $77.79 million in the prior-year quarter, while gross profit was $109.82 million, down from $162.98 million in the year-ago quarter.
The company ended the second quarter with cash and cash equivalents of $172.48 million, compared to $168.48 million at end of the prior-year quarter.
For the first six months, Albemarle reported net income of $63.89 million or $0.70 per share, sharply down from $124.92 million or $1.34 per share in the prior-year period. Excluding special items, adjusted earnings per share for the period dropped to $0.66 from the year-ago period's $1.36.
Net sales for the year-to-date period dropped to $931.89 million from $1.29 billion in the same period last year.
ALB closed Wednesday's regular trading session at $27.19, up $0.84 or 3.19% on a volume of 0.81 million shares, higher than the three-month average volume of 0.66 million shares.
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