Specialty chemical company
Chemtura Corporation
(
CHMT
) recently announced that it will raise the prices for its
polyester polyols by up to 6% globally. This includes the Fomrez
product lines. The move, which is effective September 1, 2012 or as
allowed by the contracts, will help the company to counter raw
material cost inflation.
Polyester polyols are used to make polyurethanes, which have
applications in a host of industries including automotive and
construction. Polyurethanes are polymers that are used to make
foams.
Chemtura makes and distributes specialty chemical solutions and
consumer products globally with annual sales of $3 billion. 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 number of industries including agriculture, automotive,
building and construction, electronics, packaging, plastics and
transportation.
Chemtura reported its second-quarter 2012 results on August 1.
Adjusted earnings of 61 cents per share outstripped the Zacks
Consensus Estimate of 52 cents. The results were driven by growth
across the company's AgroSolutions and Consumer Products divisions.
Revenues, however, fell 4% year over year to $845 million in the
quarter. Weak demand in Asia Pacific coupled with unfavorable
currency exchange translation weighed on the top line. Declines
across the Industrial Performance Products and Industrial
Engineered Products segments were, in part, offset by higher
revenues from AgroSolutions and Consumer Products units.
Chemtura has been actively engaged in increasing selling prices to
cover rising raw material costs. The company realized roughly $27
million from higher selling prices in the second quarter.
Chemtura expects to deliver year over year growth in the remainder
of 2012, aided by an improvement in its distribution channels,
continued innovation and a recovery in its Consumer Products
segment. The company also bumped up share buybacks by doubling its
share repurchase authorization to $100 million.
Chemtura currently retains a Zacks #3 Rank, implying a short-term
(1 to 3 months) Hold rating.
CHEMTURA CORP (CHMT): Free Stock Analysis
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