14 September 2011 16:22 [Source: ICIS news]
LONDON (ICIS)--Solutia has revised down its adjusted earnings per share (EPS) guidance for 2011 to a range of $1.95–2.05 from $2.10–2.25 on slower-than-expected demand for products that serve the truck and bus, solar, and electronic end markets, the ?xml:namespace>
The company added that the revision also reflected continued raw material cost pressure.
"Coming out of the second quarter, we expected that sales volumes in our key product lines would experience growth in the back half of 2011 versus the first half of the year,” said Jeffry Quinn, chairman, president and CEO of Solutia.
“Unfortunately, we have not seen an improved volume pattern develop, and the self-fulfilling nature of lower economic expectations associated with continued volatility in financial markets over the past month has impacted the company's outlook for the remainder of the year," he added.
However, Solutia said it continues to expect solid year-on-year growth in net sales and adjusted EPS for the full year.
"While the near-term outlook is less robust than expected, I am more encouraged than ever in the strategic positioning and earnings power of the company. The transformation of Solutia's portfolio, geographic footprint, cost structure and balance sheet, combined with the introduction of new innovative products for our customers, has positioned the company very well for continued sales and earnings growth in 2012 and beyond,” said Quinn.
Based on the updated earnings guidance, the company expects to generate adjusted EPS in the range of $0.89–0.99 in the second half of 2011, with approximately 45% of that expected in the third quarter and 55% in the fourth quarter, Solutia said.
The updated range represents an adjusted EPS improvement of 24–31% over 2010, it added.
In July, Solutia posted a 66% year-on-year rise in second-quarter net income, to $68m (€49.6m), partly because of a decrease in interest expenses and a 2010 loss from discontinued operations.
($1 = €0.73)
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