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TheStreet Open House

Cytec Industries' CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stock quotes in this article: CYT

The significant earnings improvement is further indication of our progress to leverage sales growth into strong earnings for the company.

Slide 4 provides more detail about the Engineered Materials results.

Sales in the segment increased substantially by 17% to $219 million, as we continue to benefit from solid demand across the entire aircraft sector. Selling volumes increased 14% versus the prior year quarter as a result of higher build rates in large commercial transport, with both legacy and new programs contributing to the increase with added growth from the business and regional jet sectors.

Selling volumes from military and civil rotorcraft markets were also higher than the prior year period. So robust demand from each sector of the aerospace market is contributing to our growth in the quarter.

Selling prices also increased by 3%, and the combined top line performance, along with the higher plant operating rates, led to operating earnings of $45 million in Q1, significantly above Q1 2011 earnings of $25 million.

Moving on to Slide 5. The In Process Separation segment delivered sales of $92 million, a 17% increase versus the first quarter of 2011. This was driven by 8% higher selling volumes and a 9% increase in selling price. The selling volume increase was primarily attributable to strong demand for our advanced technologies sold into the aluminum processing industry. Increased pricing in the quarter was also a significant contributor to the improved business performance, with increases across our mining and phosphine product lines.

Earnings in this segment were $22.9 million versus $16.4 million in the prior year period, mainly as a result of higher sales on newer technologies and the positive selling price impact. These favorable impacts were partially offset by higher manufacturing cost of sales and operating expenses of $5 million as we expand and invest in growth in developing markets.

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