Thursday, specialty chemicals and materials provider W.R. Grace & Co. (GRA) reported an increase in its third quarter profit, primarily on cost reduction and restructuring actions, notwithstanding a 15.3% drop in revenues.
The Columbia, Maryland-based company reported net income attributable to the common shareholders for the third quarter of $44.4 million or $0.61 per share, compared to $28.3 million or $0.39 per share in the year-ago quarter.
The 2009 and 2008 results were negatively affected by Chapter 11 expenses, litigation and other matters not related to core operations.
Excluding items, W.R. Grace's net income would have been $65.9 million for the third quarter of 2009 compared to $45.4 million in the prior year quarter.
Net sales for the quarter decreased 15.3% to $753.6 million from $889.4 million in the prior-year quarter, primarily due to lower sales volumes, lower cost of metals passed through to customers and unfavorable currency translation.
Segment wise, sales for the Grace Davison operating segment, which includes specialty catalysts and materials used in a wide range of industrial applications, were $518.9 million, down 10.5% from the prior year quarter.
Third quarter sales for the Grace Construction Products operating segment, which includes specialty chemicals and building materials used in commercial, infrastructure and residential construction, were $234.7 million, down 24.2% from the prior year quarter.
Gross profit margin for the third quarter was 34.8% compared to 29.1% in the prior year quarter, driven by higher price, lower raw materials and energy costs and drop in factory overhead expenses from restructuring activities.
Commenting on the results, Fred Festa, Grace's chairman, president and chief executive officer said, "We improved profitability and delivered strong cash flow. We benefited from a modest improvement in customer demand and from the cost reduction and restructuring actions we have implemented."
For the nine-month period, W.R. Grace's net income was $24.8 million or $0.34 per share, compared to $78.1 million or $1.07 per share for the prior year period.
Sales for the nine months ended September 30, 2009 declined $2.15 billion compared with $2,548.6 million in the prior year period, a 15.8% decrease.
GRA is currently trading at $23.69, up $0.74 or 3.22% on the NYSE.
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