US Albemarle blames drop in 4Q, 2012 earnings on weak economy

22 January 2013 22:04  [Source: ICIS news]

HOUSTON (ICIS)--Albemarle's fourth-quarter and 2012 earnings fell year over year, thanks to factors such as the weak global economy and demand that was lower than anticipated, the company reported on Tuesday.

The US-based specialty-chemical company, reported fourth-quarter 2012 earnings of $37.7m (€28.3m), or $0.42 per share, compared with fourth-quarter 2011 earnings of $45.5m, Albemarle said in a press release.

Excluding special items, fourth-quarter 2012 earnings were $105.2m, compared with $101.9m, for 2011. 

The company reported net sales of $687.6m in the fourth quarter of 2012 compared with net sales of $707.4m in the fourth quarter of 2011, with lower metals surcharges in the Catalysts segment more than offsetting total company volume growth.

Earnings for the full year 2012 were $311.5m, compared with $392.1m for 2011. Excluding special items, earnings for 2012 were $436.2m, compared with $446.3m for 2011. Net sales for 2012 were $2.7bn compared with $2.9bn for 2011, with the majority of the reduction caused by lower metals surcharges in the Catalysts segment. 

"2012 was a difficult year from a macroeconomic standpoint, but we are pleased with the earnings power that we demonstrated in the face of a weak global economy, the negative impact of raw material pricing related to certain metals and lower demand than originally anticipated in many of the markets served by our products, resulting in lower operating rates at many of our production units,” said Albemarle CEO Luke Kissam. “At the same time, we were able to exit the phosphorus business, freeze our pension obligations and further strengthen our balance sheet while also investing sufficient capital to permit future growth across our business portfolio."

Albemarle’s Catalysts segment generated net sales of $294.1m in the fourth quarter of 2012, a 2% increase over net sales in the fourth quarter of 2011, due mainly to favourable impacts from higher hydroprocessing and performance catalyst volumes, partially offset by lower metals surcharges in refinery catalysts and foreign currency, the company said.

The Polymer Solutions segment reported net sales of $200.1m in the fourth quarter of 2012, a 4% decrease over net sales in the fourth quarter of 2011, attributed to the year-over-year effects of the company’s phosphorus flame retardants business exit in the second quarter of 2012, Albemarle reported. Higher sales volumes in the company’s core products were offset by unfavourable pricing, mix and foreign currency impacts, the company said.

The Fine Chemistry segment’s net sales in the fourth quarter of 2012 were $193.4m, a 7% decrease versus net sales in the fourth quarter of 2011, attrubuted mainly to unfavourable pricing, lower volumes and adverse foreign currency impacts.

Albemarle is a global developer, manufacturer and marketer of highly engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services.


By: Jeremy Pafford
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