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Grace Reports Fourth Quarter 2012 Adjusted EPS Of $1.11 And Provides 2013 Earnings Outlook

Stock quotes in this article: GRA 

W. R. Grace & Co. (NYSE: GRA) announced a fourth quarter net loss of $111.6 million, or $1.48 per diluted share. The loss was due to a $365.0 million non-cash charge recorded in the quarter to adjust the company’s asbestos-related liability as previously announced on January 24, 2013. Net income for the prior-year quarter was $58.1 million, or $0.77 per diluted share. Adjusted EPS for the 2012 fourth quarter was $1.11 per diluted share compared with $0.89 per diluted share for the prior-year quarter.

Net income for the full year ended December 31, 2012, was $94.1 million, or $1.23 per diluted share, compared with $269.4 million, or $3.57 per diluted share for the prior year. Adjusted EPS for the full year was $4.17 per diluted share compared with $3.94 per diluted share for the prior year.

“I am pleased with our strong finish to the year,” stated Fred Festa, Grace’s Chairman and Chief Executive Officer. “All three operating segments demonstrated solid organic growth and strong increases in operating earnings. This performance, combined with our disciplined expense control, allowed us to improve margins and stay on track with our longer-term earnings goals.”

Fourth Quarter Results

Fourth quarter sales of $797.8 million declined 3.4 percent compared with the prior-year quarter as higher sales volumes (+5.7 percent) and improved base pricing (+2.1 percent) were offset by lower rare earth surcharges (-9.2 percent) and unfavorable currency translation (-2.0 percent). Sales in emerging regions represented 39.1 percent of sales and grew 16.1 percent compared with the prior-year quarter. Acquisitions, net of divestitures, contributed $3.0 million (+0.4 percent) to sales in the quarter.

Gross profit of $300.3 million increased 4.3 percent compared with the prior-year quarter. Gross margin of 37.6 percent increased 270 basis points compared with the prior-year quarter, exceeding the top-end of the company’s target range of 35 to 37 percent.

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