Rohm and Haas updates outlook for fourth quarter

Rohm and Haas Company said it expects to report fourth quarter operating results of $.19 to $.21 per share, in line with the current First Call consensus of $.21 per share. Chairman Raj L.

Gupta said he is quite comfortable with the consensus figure, but that last-minute customer inventory adjustments during the final days of December could have a slight influence on the final earnings figure. Spending in the fourth quarter to help the company achieve its target of a $200 million cost reduction, announced earlier this year, will reduce reported fourth quarter earnings by approximately $.04 per share.

Gupta said he was pleased to be able to say that the fourth quarter is shaping up as anticipated. "Overall sales are stabilizing, and that's good news," he said. "However, in a relatively flat sales environment, the real driver behind our performance is our ability to strategically cut costs while investing simultaneously in areas of future growth."

Reviewing sales by business group, Gupta said Performance Polymers sales are showing the normal seasonal decline in sales from the third to fourth quarter of this year, and have nearly recovered to the sales levels seen a year ago. Fourth quarter 2001 sales are being helped, in part, by milder fall weather in the United States, which has extended the painting season and boosted sales for the Coatings business. Sales for Chemical Specialties are trending slightly lower both sequentially and compared with the year-ago period.

Milder weather in recent months has meant fewer applications of de-icing salt on North American highways. However, Salt sales overall are down only 15 percent from 2000's record fourth quarter because of good demand this year from the consumer and industrial processing markets, as well as a need to refill customers' inventories of de-icing salt which were depleted by last winter's record-setting weather.

Month-to-month sequential sales for the Electronic Materials business group continue at the same steady pace reported since July 2001. However, the traditional pattern of higher sales associated with strong consumer purchases of electronics for the holiday season has not materialized. Sales of enabling technology for use in semiconductors, including pads and slurries for chemical mechanical polishing and deep ultraviolet photoresists, continue to outpace growth in other segments of this group.

Gupta gave the company excellent marks for ongoing efforts to reduce costs, to improve efficiency, and to aggressively manage working capital. "Selling, administrative and operating expenses, as well as working capital investment are down significantly from year-ago levels," he said. "This focus is enabling us to generate cash to fund future growth initiatives."

Gupta confirmed that Rohm and Haas remains on track to reach its goal of reducing the company's operating structure by $200 million by the third quarter of 2002. The $200 million figure includes recapturing $60 million in stranded costs left over after exiting a number of businesses over the past year. Gupta said today that operating earnings for the fourth quarter will be reduced by approximately $.04 per share in spending for dismantling capacity and other projects associated with the repositioning that did not qualify under the strict accounting standards used to calculate the one-time charge of $1.16 per share taken at the end of the second quarter of 2001. These non-qualified charges will continue in 2002.

Commenting specifically on earnings for the fourth quarter, Gupta reaffirmed his comfort with the current analyst consensus per share figure, but said the company felt obligated to provide shareholders with a range rather than a precise figure based solely on external factors. "Customers in some of our markets have said they may extend end-of-year holiday shutdowns as a way of controlling inventory, while others have indicated they may now shorten the length of the shutdowns planned earlier in the quarter," said Gupta. "Therefore, it's wise at this point to acknowledge the potential for a very slight swing in our final earnings number once everything is added up at the end of the period."

Gupta ended on an optimistic note, indicating that, "Potential inventory adjustments during the last 10 days of the quarter aside, there are increasing signs of longer-term stabilization in demand in the markets we serve. The strength of our market positions, our ability to bring innovative new products to market and to improve internal efficiency even through a downturn makes me increasingly confident in Rohm and Haas's ability to provide an excellent return to shareholders as the economies improve."

600450 Rohm and Haas updates outlook for fourth quarter
Date: 5 January 2002
Source: Rohm and Haas

See more news about:

Others also read

Nancy Adkins, a logistics load planner at Atofina Chemicals, will represent the Union Pacific Railroad Company in the Olympic Torch Relay.
Italian glass manufacturer Venini is once again in Italian hands. The company, which was acquired by Danish giant Royal Scandinavia in 1998 from the Gardini family, has been acquired by Italian Luxury, the company set up as part of a strategic alliance between Venice-based businessmen Giancarlo Chimento and Giuliano Tabacchi.Italian Luxury was assisted in the operation by Milan-based merchant bank Mediobanca.
Dear Visitors,GlassOnWeb's News service is taking a break during the holiday season!The News service will resume January 2nd 2002.
Dr. L. Louis Hegedus, senior vice president, research and development for Atofina Chemicals, Inc., has announced that 24 researchers from the Company’s research center have been granted patents for 2000 and 2001 from the U.S.
At a ceremony in Paris, the French Minister of Environment, Yves Cochet, presented to Rohm and Haas Lauterbourg the “Entreprises & Environnement” first Prize award in the field of eco management.
Reichhold, Inc. announced three leaders to jointly lead its newly formed supply chain organization, which combines the company's purchasing and logistics groups.

Add new comment