Chemtura Corporation ( CHMT ) has provided a
highlight on how its segments are performing in the second quarter
of 2013 along with its current guidance for the quarter.
Industrial Performance Products: Chemtura stated
that the segment is performing in line with what it had delivered
in the first quarter of 2013 and is facing similar market
conditions. The current quarter results for the segment are
expected to be similar to those in the previous quarter.
Industrial Engineered Products: According to
Chemtura, demand for flame retardants used in insulation foams
stabilized in the current quarter after falling sharply in the
first quarter. Also demand from electronics applications is showing
modest sequential improvement.
For the second quarter, Chemtura expects margins to remain under
pressure due to challenging business conditions and increased raw
material costs. The company expects the net impact to reduce
operating income for the segment this quarter by $5 million to $10
million from the $20 million it had earned in the previous
Consumer Products: Though the segment started
the quarter at a slow rate, Chemtura stated that sales have started
increasing and is expected to deliver almost at par with the $20
million of operating income it had earned in year-ago quarter.
Chemtura AgroSolutions: The late start to this
year's growing season impacted sales in the initial month of the
quarter. However, sales have picked up and the segment is on track
to deliver a comparable performance to that of the second quarter
Chemtura expects the cash expense component of general corporate
expense to decrease in the second quarter compared with the
sequentially prior quarter as the company will implement its
actions to eliminate stranded costs, resulting from the divestiture
of its Antioxidants business that closed in April 2013, among other
Chemtura expects to fall short of its performance in the second
quarter of 2012 on a continuing operations basis due to the
challenges faced by the Industrial Engineered Products segment.
However, the company remains optimistic about the strong
performance from its other three segments.
Chemtura currently carries a Zacks Rank #5 (Strong Sell).
Other companies in the specialty chemicals industry with
favorable Zacks Rank are OM Group Inc. ( OMG ), American
Vanguard Corp. ( AVD ) and Ferro
Corp. ( FOE
). While American Vanguard holds a Zacks Rank #1 (Strong Buy),
Ferro Corp. and OM Group retain a Zacks Rank #2 (Buy).AMER VANGUARD (AVD): Free Stock Analysis ReportCHEMTURA CORP (CHMT): Free Stock Analysis
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