13 April 2007 18:54 [Source: ICIS news]
HOUSTON (ICIS news)--Specialty chemical company Lubrizol of Ohio said on Friday it expects strong first-quarter earnings on higher sales, beating Wall Street estimates.
Lubrizol said its preliminary first-quarter results indicate earnings of about 98 cents/share (excluding a 2-cent restructuring credit), beating the Wall Street consensus estimate of 78 cents.
During the first quarter of 2006, Lubrizol reported earnings of 66 cents/share, including a restructuring charge of 2 cents.
Lubrizol attributed its performance to improvements in its prices and product mixes, all of which increased revenues. Also, shipment volumes exceeded Lubrizol’s expectations.
Lubrizol’s first-quarter surprise was largely the result of its ability to hold price and recover lost margin in its lube additives segment, which accounted for 64% of the company’s sales, said Citigroup analyst P.J. Jukevar.
In the fourth quarter, “customers began destocking inventories as raw material prices declined”, Jukevar said in a statement. “While volumes started to rebound in January, this accelerated faster than expected.”
“Maintaining pricing amid falling raw material costs - Lube Additive raw material prices are still up year over year, but lower quarter over quarter,” Jukevar continued. Lubrizol “as able to hit a ‘sweet spot’ by maintaining price, reaping the benefits of [first-quarter] lower raw material costs, and enjoying the effects of 2-3 full price increases in 2006.”
The company will announce its first-quarter earnings on 27 April.
(Additional reporting by Brian Ford)
By Al Greenwood
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