Earnings

Return to Article

Lubrizol Profit Falls On Lower Chemical Sales

The Associated Press

CLEVELAND (AP) — The Lubrizol Corp. said Thursday that its first-quarter profit fell on an 18 percent drop in sales as demand for specialty chemicals weakened in the recession.

The earnings still beat expectations and its shares rose more than 3 percent.

The company said it earned $64.2 million, or 95 cents per share, for the three months ended March 31 compared with $73.6 million, or $1.06 per share, a year ago.

The 2009 results included after-tax restructuring charges of $7.6 million, or 11 cents per share. Without the charge, Lubrizol would have earned $1.06 a share in the quarter.

That was well above the average estimate of analysts surveyed by Thomson Reuters. They expected earnings of 97 cents a share and usually exclude one-time items from their calculations.

Revenue fell to $1.01 billion from $1.23 billion a year ago. The company blamed lower volume and unfavorable currency exchanges. Analysts expected sales of $1.15 billion.

The Wickliffe, Ohio-based company said the lower sales led to the failure to absorb manufacturing costs. The company also had higher interest expenses and lower interest income.

By sector, sales in the company's additives business fell 14 percent, and the advanced-materials segment saw sales fall 26 percent. Declines were especially sharp in engineered polymers and performance coatings.

Chief Executive James Hambrick said officials "knew 2009 was going to be a challenging year," and he declared satisfaction with results from both business segments.

Lubrizol makes specialty chemicals for companies in transportation, industry and consumer goods, including industrial and engine lubricants.

Shares rose $1.52, or 3.6 percent, to $43.74 in midday trading.