Specialty chemicals and advanced materials company
Rockwood Holdings, Inc .'s ( ROC ) first-quarter
2013 adjusted earnings (excluding other net charges) of 68 cents
per share were down roughly 45% from the last year's earnings of
$1.23, but beat the Zacks Consensus Estimate by a penny.
On a reported basis, the company posted a profit of $18.9
million or 24 cents per share in the quarter, down 75% from $75.8
million or 94 cents per share a year ago. The bottom line was hit
by weak results from Titanium Dioxide (TiO2) Pigments and
Performance Additives units, partially offset by improved results
from Lithium and the Advanced Ceramics medical business.
Revenues rose 2.7% year over year to $934.6 million in the
quarter, surpassing the Zacks Consensus Estimate of $901
Lithium businesses' net sales increased 3.3% on the back of
higher selling prices for most product lines and higher volumes of
potash, partially offset by lower volumes of battery products and
Net sales from the Surface Treatment segment fell 2.2% year over
year, attributable to lower volumes in Europe partly offset by
increased selling prices in Europe and U.S. and higher volumes of
automotive OEM and aerospace applications.
The Performance Additives division also reported a 9.9% drop in
net sales as a result of lower volumes from North American oil and
natural gas drilling, coatings applications and also from European
Net sales from the Titanium Dioxide Pigments unit surged 21.3%
in the quarter, mostly due to acquisition of certain assets from
Crenox GmbH in Jul 2012, partially offset by lower selling
The Advanced Ceramics segment reported a 1.2% drop in net sales
due to lower volumes in most applications, partly offset by higher
volumes of medical ceramics.
Net sales from the Corporate and other segment fell 3.8% year
over year due to lower volumes in the metal sulfides business.
Cash and cash equivalents stood at $491.1 million as of Mar 31,
2013, up from $97.9 million as of Mar 31, 2012. Net debt increased
to $1,730.9 million as of Mar 31, 2013, from $1,425.1 million as of
Mar 31, 2012.
Rockwood Holdings expects all of its businesses, except TiO2
Pigments, to improve year over year in the remainder of 2013. The
TiO2 business is expected to continue its weak performance during
the second quarter of 2013 before it turns profitable in the second
half. The Performance Additives segment is expected to gain
momentum moving ahead on improving U.S. remodeling and construction
Rockwood Holdings will focus on optimizing free cash flows and
implementing appropriate capital allocation strategies through
dividends and share repurchases and reinvestment in key businesses
in 2013. Some of its growth projects include the expansion of the
Chilean project for increasing the lithium carbonate capacity and
manufacturing facilities in Germany for the production of ceramic
Rockwood Holdings currently holds a Zacks Rank #5 (Strong
Sell).AMER VANGUARD (AVD): Free Stock Analysis ReportFERRO CORP (FOE): Free Stock Analysis ReportMINERAL TECH (MTX): Free Stock Analysis ReportROCKWOOD HLDGS (ROC): Free Stock Analysis
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Other companies in the specialty chemical space that are worth
considering include American Vanguard Corp. ( AVD ), Ferro
Corp. ( FOE
) and Minerals Technologies Inc. ( MTX ). While American
Vanguard retains a Zacks Rank #1 (Strong Buy), both Ferro Corp and
Minerals Technologies hold a Zacks Rank #2 (Buy).