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Earnings Down at Cytec Industries

It blames higher raw material costs.

Cytec Industries

(CYT)

said Thursday its third-quarter earnings fell 29.4% from the year-ago period.

The West Paterson, N.J.-based company earned $25 million, or 51 cents a share, in the quarter, compared with $35.4 million, or 75 cents a share, a year ago. Excluding charges, the company earned 87 cents a share. Analysts surveyed by Thomson First Call were expecting earnings of 92 cents a share in the most recent quarter.

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Third-quarter revenue rose 13.5% to $863.4 million vs. analysts' estimate of $812.3 million.

Excluding items, Cytec revised its earnings forecast for the full year to $3.41 to $3.51 a share compared to its earlier guidance of $3.41 to $3.66 a share. Analysts are expecting earnings of $3.58 a share for 2006.

Revenue from the performance chemicals increased 10% to $233 million, surface specialties increased 8% to $383.6 million, engineered materials increased 11% to $150.9 million, and building block chemicals rose 60.1% to $95.9 million.

"We had a very strong sales growth performance in the third quarter as our specialty businesses sales volume grew over 7% over the prior year period. However, we saw continued escalation in raw material costs coupled with significant tightness in raw material supplies which led to challenges in availability and significant cost increases cutting into our operating margins," the company said. "We are raising prices but the lag effect in implementing selling price increases did not allow us to offset the cost increases in this quarter."

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