Tuesday, water treatment and process improvement company Nalco Holding Co. (NLC) reported a second-quarter loss, compared to a profit in the previous year, due to restructuring charges and early debt extinguishment costs. Net sales for the quarter also declined, mainly due to the impact of currency translation.
The Naperville, Illinois-based company reported a net loss attributable to Nalco Holding for the second quarter of $29.2 million or $0.21 per share, compared to net income of $44.2 million or $0.31 per share in the year-ago quarter. The company attributed restructuring charges and early debt extinguishment costs as the main drivers of the quarterly loss.
The restructuring costs of $24 million included re-sizing employment levels and a $20 million non-cash asset impairment to close several plants in the network.
Excluding charges and other special items, pro forma earnings per share were $0.11 compared to $0.32 for the second quarter of 2008.
On average, fourteen analysts polled by Thomson Reuters expected the company to earn $0.24 per share for the quarter. Analysts' estimates typically excludes special items.
Operating earnings for the second quarter also declined to $50.0 million from $121.9 million in the corresponding quarter a year ago despite a decline in operating expenses. Operating expenses for the fourth quarter came in at $863.1 million, down from $944.4 million in the same quarter last year.
Net sales for the quarter declined 14.4% to $913.1 million from $1.07 billion in the prior-year quarter. Ten analysts had a revenue consensus of $949.71 million for the second quarter.
Organic sales for the quarter dropped 6.4% as declines in mining, primary metals and gas well drilling markets added to ongoing challenges in paper and manufacturing markets. The company said 7.0% decline in second quarter sales were due to the effects of currency translation and the remaining 1.0% of the decline in sales were due to divestitures.
Sales from energy services for the second quarter were $349.4 million, down from $364.6 million in the corresponding quarter a year ago.
Sales from the water services segment for the second quarter decreased 9.1% to $403.4 million from $499.3 million in the same quarter last year, hurt by double-digit sales reductions in mining, metals, manufacturing and colloidal technologies segments as the sources of greatest contraction.
Sales from the paper services segment declined to $160.3 million from $202.4 million in the second quarter of last year due to a steep decline in paper end markets.
Total segment direct revenue contribution for the quarter was $172.7 million, down from $192.6 million in the second quarter of previous year.
For the six-month period, net loss attributable to Nalco Holding was $6.0 million or $0.04 per share, compared to net income of $73.4 million or $0.51 per share in the same period last year.
Net sales for the first half of fiscal year 2009 fell to $1.78 billion from $2.07 billion in the similar period of 2008.
NLC closed Tuesday's trading session at $18.66, down $0.07 or 0.37% on a volume of 1.13 million shares on the NYSE.
For comments and feedback: editorial@rttnews.com