05 January 2011 23:02 [Source: ICIS news]
HOUSTON (ICIS)--Fiscal 2011 first-quarter net income for A Schulman sank 46% to $9.2m (€6.9m) because of higher costs, the US plastics compounder said on Wednesday.
Net sales were $495.4m, up 37% from the 2010 first quarter, the company said.
Schulman’s cost of sales rose 42% to $426.4m, while selling, general and administrative (SG&A) expenses increased 30% to $52.9m.
However, the company noted a quarter-on-quarter improvement in gross profit per pound from the fiscal 2010 fourth quarter.
“The sequential improvement indicates that the pricing measures we’ve initiated are beginning to take hold, even as we are negotiating additional price increases to be passed through - particularly in Europe where we saw the greatest margin pressure,” CEO Joseph Gingo said.
The company said the higher SG&A spending resulted from proactive steps to invest in the company’s core businesses and drive growth through a third-party strategic review.
Looking forward, Schulman said its fiscal 2011 second quarter was expected to be significantly stronger year on year but in the same range as the first quarter, owing to the typically slower business pace of the December holiday season and new pricing measures expected to take effect in January.
Overall, Schulman reaffirmed its fiscal 2011 net income guidance in the range of $57m-62m.
($1 = €0.75)
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