Ashland warns on fiscal Q4 results

21 October 2008 16:49  [Source: ICIS news]

TORONTO (ICIS new)--US diversified chemicals company Ashland said on Tuesday it expected to record a fiscal fourth-quarter loss in its water technologies business.


Overall fourth-quarter earnings from continuing operations for the three months ended 30 September were expected to come in near break-even level, the company said.


Water technologies’ expected loss was primarily due to a significant reduction in gross profit percentage across all regions, with the fourth quarter being particularly weak, the company said.


Meanwhile, Ashland’s chemical distribution business experienced lower volumes than anticipated due to weakness in both the North American and European markets and higher selling, general and administrative expenses, it said.


However, Ashland said it expected distribution to report a significant improvement over the year-earlier quarter, driven by improved gross profit margins.


Sequentially, fourth-quarter distribution results would be about two-thirds of those reported in the 2008 third-quarter quarter, it added.


Overall fourth-quarter results would also include roughly $7m (€5m) in restructuring costs related to previously announced cost structure efficiency initiatives, it said.


In addition, the 2008 quarter was expected to include a $10m loss from discontinued operations due to adjustments to asbestos-related insurance receivables, it said.


Ashland is due to report preliminary fiscal fourth-quarter results on 28 October.


Analysts said on Monday they expected US chemical producers to report much weaker quarterly results for the period ended 30 September due to the country's economic troubles.


($1 = €0.75)


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By: Stefan Baumgarten
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