Monday, chlor alkali product maker Olin Corp. (OLN), reported a modest rise in profit for the third quarter, notwithstanding a drop in sales from last year, as earnings from its Winchester segment more than doubled, reflecting the combination of seasonally strong sales, the continuation of the stronger than normal demand, and lower costs. The company also provided earnings forecast for the fourth quarter of fiscal year 2009. Shares of Olin climbed more than 6% in the after-hours trading, following the announcement of results.
The Clayton, Missouri-based company's net income for the fourth quarter edged up to $39.4 million or $0.50 per share from $37.7 million or $0.49 per share in the year-ago quarter.
On average, four analysts polled by Thomson Reuters expected the company to post a loss of $0.08 per share for the quarter. Analysts' estimates typically exclude one-time charges and gains.
Quarterly sales dropped to $397.0 million from $502.9 million last year. Analysts expected the company to report revenue of $333.07 million for the quarter.
Segment-wise, sales from Chlor Alkali product for the quarter were $228.8 million, down from $362.1 million in the same quarter last year, reflecting a 20% decline in chlorine and caustic soda volumes. Winchester sales rose to $168.2 million from $140.8 million in the year-earlier quarter, primarily reflecting higher sales volumes.
Pension income for the quarter was $6.3 million, compared to $5.2 million in the year-ago quarter. Operating income for the quarter was $50.6 million, compared to $87.0 million in the same quarter a year ago.
For the nine-month period, net income rose to $113.9 million from $110.5 million in the same period last year. On a per share basis, earnings were flat at $1.46 per share with last year.
Sales for nine months declined to $1.18 billion from $1.33 billion last year.
Olin also declared a dividend of $0.20 per share, payable on December 10, 2009 to stockholders of record as of the close of business on November 10, 2009.
Looking ahead to the fourth quarter, the company expects earnings of $0.15 per share. Analysts currently anticipate earnings of $0.28 per share for the quarter. The guidance also includes an anticipated $35 million of additional recoveries from third parties for environmental costs incurred and expensed in prior periods. Analysts currently expect the company to report breakeven per share for the fourth quarter.
OLN closed Monday's trading at $15.84, down $0.28 or 1.74%, on a volume of 1.69 million shares on the NYSE. In after hours, the stock gained $1.04 or 6.57%, trading at $16.88.
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