Ashland fiscal Q3 net drops 28% on materials fall
24 July 2008 14:02 [Source: ICIS news]
LONDON (ICIS news)--Ashland's third-quarter net income dropped 28% to $72m (€46m) year on year on the back of pension and environmental costs as well as weak margins in its materials division, the US specialty chemicals company said on Thursday.
Operating income for the quarter totalled $87m compared with $91m during the same three months last year.
The company said this included unusually large adjustments to pension and other benefit costs of $11m, plus environmental reserves of $7m.
Sales were 11% higher year on year during the period ended 30 June at $2.2bn. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were 3% up at $121m.
"We are encouraged by our overall performance in the third quarter, given the difficult economic environment, both from a demand and raw material cost perspective,” said chairman and CEO James J O'Brien
Ashland Distribution’s operating income surged 70% year on year, while the water technologies unit more than doubled its operating income.
O’Brien said the performance materials division’s operating income fell significantly due to weak margins.
Valvoline's earnings dropped 6% compared with the year-ago quarter, but improved over the March 2008 quarter, as the traditionally strong summer driving season got under way.
"While the economic environment continues to present a challenge, we have announced a number of strategic moves that enable us to strengthen our profile as a specialty chemicals company,” O'Brien said.
Ashland reached an agreement to buy Hercules on 11 June for $3.3bn. The transaction, which would create a major, global specialty chemicals company, was expected to close by the end of 2008.
($1 = €0.64)
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