US Albemarle sees Q3 sequential improvement, Q4 uncertainty

23 July 2009 17:20  [Source: ICIS news]

HOUSTON (ICIS news)--US Albemarle on Thursday predicted a continued sequential improvement in the third quarter but said the timing of a sustained demand recovery remained uncertain.

“Our base product lines are doing well as a result of some improvement in demand,” CEO Mark Rohr said on a conference call. “The third quarter will continue to improve, and the second half will be stronger than the first half.”

“It’s hard to see signs of significant end-market recovery, but we are seeing positive trends in several market segments,” he added.

The company’s second-quarter net profits fell to $38.5m (€27m) from $61.7m in the year-ago quarter, down 37.6% year on year. However, that was up 51.6% from the $25.4m profit it posted in the first quarter, leading Rohr to call it a “fantastic performance”.

Shares of the company soared by 10.3% on Thursday, moving at $29.98/share in mid-day trading on the New York Stock Exchange.

Albemarle benefited largely from a $37m decrease in raw material costs, $25m of which came within metals in the company’s catalysts’ segment.

“Pricing was improved year over year, which helped to offset volume declines,” Rohr said. “We expect further raw material and energy deflation will provide additional opportunities.”

The company’s polymer additives segment posted a net income of $14.7m, up from a loss of $11.7m in the first quarter. Moreover, Rohr said the segment had started “fairly strong” in July.

However, the company warned that the global economic crisis complicated predictions beyond the immediate future.

“Economically speaking, for our base business, all we have is more uncertainty in our ability to see past the third quarter,” Rohr said.

“It probably will all come down to December and what our customers are doing in terms of continuing to produce or cutting back and limiting inventory.”

($1 = €0.70)

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By: Ben DuBose
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