Sequentially, sales volumes have shown steady improvement, as inventories remain low throughout the supply chain and consumer demand has strengthened in many of Solutia's businesses. Additionally, the cost savings from Solutia's $100 million cost reduction initiative and a strengthening euro are having a positive impact on Solutia's bottom line. This improved earnings outlook includes an approximate 5 cents per share loss due to a power outage from a lightning strike at the Chocolate Bayou facility in April, as well as higher than expected energy and raw material costs.
"I am encouraged by recent signs of improvement in the global economy, as evidenced by our second quarter earnings," said John Hunter, chairman and chief executive officer.
"We remain focused on the areas of our portfolio with the greatest impact on the bottom line. Our cost savings initiative allowed us to streamline the way we conduct business, and our dedication to the portfolio strategy has given us the opportunity to expand into areas where customers reward our creativity and superb level of service. Should the economic environment continue to recover, Solutia is well positioned to capitalize on the opportunities we have created," Hunter said.