US Ferro’s Q1 net income jumps on performance materials

23 April 2014 22:18 Source:ICIS News

HOUSTON (ICIS)--Ferro’s Q1 2014 net income jumped to $17.2m thanks in part to improvements in its performance materials segments, the US compounder said on Wednesday.

The $17.2m was a substantial improvement over Q1 2013’s $883,000 net income.

Ferro benefitted from lower expenses across the board, including an almost 11% reduction in cost of sales year over year.

The rise in net income came despite a 6.2% decrease in year-on-year net sales, to $392m in Q1 2014 from $418m in the year-prior period.

Showing gross profit growth were the Performance Colors and Glass and Performance Coatings segments.

Performance Colors and Glass saw its gross profit grow more than 22% in Q1 2014 to $33.4m from $27.3m in the year-prior period.

Gross profit in Performance Coatings increased about 16% in the quarter to $33.2m from $28.6m in Q1 2013.

Said CEO Peter Thomas: “I’m pleased with our results for the first quarter, particularly as it pertains to our core performance materials segments, including Performance Coatings and Performance Colors and Glass, where we achieved solid aggregate value-added sales growth of 5% and higher gross profit margins. Volume growth in these two segments was 9% and 7%, though the volume gains were partially offset by lower average selling prices and mix.”

Challenges remain despite the strength of the performance segments, Thomas said.

“Despite the strong start to the year, we continue to face business challenges, including reduced demand in the Polymer Additives and the Pigments, Powders and Oxides segments, competitive pricing pressure in key product lines, political instability in certain geographies and reduced macro-economic growth prospects in some regions, including China,” the CEO said.

By Jeremy Pafford