fourth-quarter earnings rose 43% from a year ago, helped by gains.
The manufacturer of metals, chemicals, and ammunition earned $32.6 million, or 45 cents a share, in the quarter, compared with $22.8 million, or 32 cents a share, a year ago.
Fourth quarter 2005 earnings include a pretax recovery from a third party of $30.4 million for environmental costs incurred in prior periods; a $2.5 million pretax gain related to asset retirement obligations; and a $10.5 million pretax cumulative charge on an accounting change related to Conditional Asset Retirement Obligations.
Analysts polled by Thomson First Call were expecting earnings of 28 cents a share.
Revenue for the firm in the fourth quarter was $604.1 million, a 24% increase from a year ago. The Thomson First Call estimate was $542 million.
"As a consequence of the ongoing cost reduction efforts of our metals business, we have made the decision to close our Waterbury Rolling Mills facility in Waterbury, Conn. In conjunction with this action, we will consolidate these production activities into our East Alton, Il. mill. We are also considering decisions regarding the possible restructuring or closure of additional facilities, in addition to other overhead reductions."
Olin expects to earn 45 cents a share in the first quarter of 2006, excluding charges associated with the cost reduction efforts in its metals business. It said that a closure will result in a charge between $25 million to $30 million this year, with the bulk of it taken in the first quarter of 2006. The Wall Street estimate for the quarter is 48 cents a share.
Despite a 10% decline in chlorine and caustic volumes, Chlor Alkali product sales for the fourth quarter of 2005 increased by 21% to $156.7 million. Metals sales for the fourth quarter of 2005 were $366.7 million, compared with $278.6 million for the fourth quarter of 2004. This increase in sales is due to higher copper prices in the fourth quarter of 2005 and an increase in shipment volume.
Winchester fourth quarter 2005 sales were $80.7 million, which is slightly higher than fourth quarter 2004 sales of $78.7 million. Higher commodity costs in 2005 led to a loss of $300,000 compared to income of $2.4 million in the Winchester's fourth quarter of 2004.
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