22 April 1998 16:50 [Source: ICIS news]
HOUSTON (CNI)--AlliedSignal said Wednesday that first quarter profits jumped 17.6% at its engineered materials division to a record $127m on sales of $1.125bn.
Engineered materials comprises the company's chemical operations and contributed 30% of Allied's total sales for the quarter. Including the company's aerospace and automotive divisions, first quarter earnings increased 16% overall on a 10% jump in sales for the Morris Township, New Jersey company.
In regard to chemicals, Allied said income gains from volume growth and larger spreads between raw material costs and selling prices were partially offset by a drop in fluorine prices and softness in Asian semiconductor markets.
Allied said polymers sales increased thanks to strong demand in engineering plastics and record sales for speciality films. Engineering plastics is benefiting from the introduction of new applications, the company said.
Meanwhile, speciality films sales gained from increased manufacturing capacity plus strong demand by the pharmaceutical packaging market for Allied's Aclar blister pack product, Allied said.
Net income for polymers more than doubled with the help of a significant reduction in nylon raw materials costs. In addition, industrial polyester net income improved dramatically due to strong volume growth, an enhanced product mix and a substantially improved spread between price and cost.
Allied said speciality chemicals sales grew substantially with an increase in sales of waxes, adhesives and sealants. That sector also gained from increases in pharmaceutical, agricultural and fluorine products. The company said that lower ethylene costs balanced the lower selling prices for fluorines.
With regard to electronic materials, Allied saw volume gains in multilayer laminates. But lower Asian sales of advanced microelectronic materials and a less favourable price-cost spread for laminates prompted a drop in net income.
"Along with the continued outstanding performance of our aerospace businesses, the first quarter results reflect a marked improvement in the sales and profitability of our engineered materials businesses," said Lawrence Bossidy, chairman and chief executive at Allied.
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