25 July 2012 23:54 [Source: ICIS news]
HOUSTON (ICIS)--A weakened economy in Europe and unexpected expenses helped to plunge Ferro into a $2.8m (€2.3m) second-quarter net loss, the US-based specialties chemicals producer said on Wednesday.
Ferro swung to the loss from a profit of $19.4m attributable to common shareholders for the same period last year.
Net sales for the quarter ended 30 June dropped by 19% to $482m from the same quarter in 2011.
“The business recorded sequential sales growth in the United States and Asia-Pacific compared with the first quarter of 2012,” said James Kirsch. “However, sales and earnings were negatively impacted by the effects of a weakening economic environment in Europe and higher than expected healthcare and pension expenses.”
Reduced sales of electronic materials products, including precious metal sales, largely drove the drop in sales, Ferro said.
The company cited less demand for conductive pastes used in solar cell applications, metal powders used in electronic products and surface finishing materials
Kirsch said Ferro was taking “aggressive steps” to lower costs in Europe with a new management information systems platform that would allow it to cut future operating costs and administrative expense.
“In addition, we expect to move forward on staffing reductions that will lower annual costs by approximately $5m in our European operations through consolidation of certain manufacturing and administrative resources in our performance coatings business,” Kirsch said.
Looking forward, Ferro said it expects 2012 sales, excluding precious metal pass-throughs, to be down by 3-7% compared with 2011.
Sales of precious metals were expected to decline because of lower average prices and lower volume.
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