Specialty chemical manufacturer Albemarle Corp. (ALB) reported Monday that profit for the fourth quarter surged year-over-year, boosted by 8% quarterly sales growth as well as higher operating margins. The company also noted that all segments experienced year-over-year increases in segment income and margin. Adjusted earnings per share for the quarter surged, and topped analysts' expectations by seven cents, while quarterly revenues grew, and also beat consensus estimate.
In a statement, chairman and chief executive officer, Mark Rohr said, "Our fourth quarter performance demonstrates tangible improvements in sales and profitability, resulting in strong earnings of $0.64 per share, excluding special and one-time tax items. All three business segments delivered solid quarterly year-over-year profit growth, improving the Company's segment income margin to 16.7%, the highest operating margin since second quarter of 2007. Our plants were able to maintain efficient and cost effective production rates throughout the quarter while we continued our efforts to better manage inventory."
The Baton Rouge, Louisiana-based company reported net income of $62.35 million or $0.68 per share for the fourth quarter, higher than $13.11 million or $0.14 per share in the prior-year quarter.
The results for the latest quarter include $7.6 million or $0.08 per share of restructuring and other costs, and $11.3 million or $0.12 per share of one-time tax benefits related principally to the settlement of the 2005-2007 tax audits with the U.S. Internal Revenue Service.
The year-ago quarter included a charge amounting to $33.4 million or $0.36 per share related to the divestiture of the Port de Bouc, France facility to International Chemical Investors Group S.A. effective December 31, 2008, as well as charges amounting to $14.7 million or $0.16 per share relating to restructuring activities, principally reductions in force at various company locations.
Excluding these special items, adjusted earnings per share for the quarter surged to $0.64 per share from the year-ago quarter's $0.41. On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.57 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 8% to $558.23 million from $517.73 million in the same quarter last year, and topped eight Wall Street analysts' consensus estimate of $528.87 million.
On a segmental basis, for the fourth quarter, fine chemicals delivered net sales of $145.70 million, a 10% drop from $161.34 million in the same quarter last year. Polymer Additives net sales rose 38% to $204.57 million from $148.67 million in the year-ago quarter. Catalysts net sales for the quarter was flat with the prior-year quarter at $207.96 million.
Operating profit for the fourth quarter plunged to $63.44 million, compared to operating loss of $17.58 million in the prior-year quarter, while gross profit was $149.46 million, up from $123.10 million in the year-ago quarter.
The company reported restructuring and other charges of $11.64 million for the fourth quarter, down from $22.51 million in the prior-year quarter. The year-ago quarter also included $38.54 million of Port de Bouc charges.
Income tax benefit for the quarter was $5.35 million, compared to $45.95 million in the same quarter last year. The company ended the fourth quarter with cash and cash equivalents of $308.79 million, compared to $253.30 million at end of the prior-year quarter.
For fiscal 2009, Albemarle reported net income of $178.37 million or $1.94 per share, down from $194.20 million or $2.09 per share in the prior year.
Excluding special items, adjusted earnings per share for the period dropped to $1.86 from the year-ago period's $2.39. Analysts expected the company to report earnings of $1.82 per share.
Net sales for the full-year 2009 dropped to $2.01 billion from $2.47 billion in the same period last year. The Street was looking for full-year revenues of $1.97 billion.
"Overall, we are encouraged by the trends we are seeing in our businesses as well as the continued focused execution by our employees across the globe. I expect 2010 will be a year of strong overall revenue and profit growth for our company and believe we have the financial flexibility and capability to opportunistically fund future growth initiatives," Rohr added.
For fiscal 2010, the company expects its overall performance to follow the gradually improving market conditions through the year. The company also expects operating efficiency gains, new product sales, particularly in alternative fuels and improving consumer appetite for electronics to help overcome the headwinds and provide the basis for both top and bottom-line growth for Albemarle in 2010.
ALB closed Monday's regular trading session at $36.50, up $0.41 or 1.14% on a volume of 0.83 million shares, higher than the three-month average volume of 0.60 million shares.
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