Chemtura Misses Squarely - Analyst Blog

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Specialty chemical company Chemtura Corporation 's ( CHMT ) fourth-quarter 2012 profit from continuing operation rose 13% year over year to $27 million or 27 cents a share from $24 million or 24 cents a share a year ago, aided by higher sales. Adjusted earnings (excluding one-time items) of 15 cents per share missed the Zacks Consensus Estimate of 32 cents.

For the full year, profit (from continuing operation) jumped 43% year over year to $134 million or $1.35 per share. Adjusted earnings of $1.16 per share missed the Zacks Consensus Estimate of $1.46. 

Revenues went up 8% year over year to $622 million in the fourth quarter, but missed the Zacks Consensus Estimate of $681 million. The results were driven by healthy growth across the company's AgroSolutions and Industrial Engineered Products divisions. However, Chemtura saw weak demand for its organometallic tin products used in automotive and glass applications. 

For the full year, sales edged up 1% year over year to $2,629 million, falling behind the Zacks Consensus Estimate of $2,974 million. 

Revenues from the Industrial Performance Products segment inched up 1% year over year to $214 million in the reported quarter. Higher sales volumes were offset by a decline in selling prices. The company saw weak margin for the petroleum additive products. 

Industrial Engineered Products division's sales jumped 14% to $221 million on higher volumes and pricing. Higher demand for oilfield, electronic and insulation foam products masked weakness across building, construction, automotive applications and organometallic products.

Revenues from the Consumer Products unit rose 2% to $89 million on higher sales volume. 

Chemtura AgroSolutions segment's sales jumped 14% to $98 million on higher sales volume and pricing. Sales benefited from drier climate and gains in resale and seed treatment products.

Chemtura exited 2012 with cash and cash equivalents of $363 million, more-than-double year over year. Long-term debt jumped 16% year over year to $871 million. Operating cash flow surged 20% year over year to $218 million in 2012. 

Moving ahead, Chemtura sees improved demand environment across the industrial markets in serves. While the company envisions some challenges in first-quarter 2013, it expects demand to recover as the year progresses, aided by Asia-Pacific. The company will remain focused on margin improvement and bringing new products to its customers.  

Chemtura makes and distributes specialty chemical solutions and consumer products globally. Its broad range of offerings includes recreational water purification products, petroleum additives, seed treatments, pesticides, bromine and bromine-based products and hot cast elastomers. The company serves a host of industries including agriculture, automotive, building and construction, electronics, packaging, plastics and transportation.

Chemtura currently carries a Zacks Rank #3 (Hold).

Other companies in the specialty chemicals industry with a favorable Zacks Rank are Novozymes A/S ( NVZMY ), Penford Corporation ( PENX ) and Quaker Chemical Corporation ( KWR ). All of them hold a Zacks Rank #1 (Strong Buy).



CHEMTURA CORP (CHMT): Free Stock Analysis Report

QUAKER CHEMICAL (KWR): Free Stock Analysis Report

NOVOZYMES A/S (NVZMY): Get Free Report

PENFORD CORP (PENX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CHMT , KWR , NVZMY , PENX

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