plummeted 24% in morning trading after the company said its second-quarter loss per share will be wider than expected.
The company said operating results were hurt by high raw material and energy costs and by the severe decline of the U.S. textiles industry. Recently, shares of Solutia were down 55 cents at $1.70 on the news.
Solutia expects a loss of 15 cents to 20 cents a share, which includes restructuring charges of 6 cents to 7 cents a share. Excluding the charges, the company expects a loss of 8 cents to 13 cents a share.
Analysts were looking for the company to lose 2 cents a share in the quarter. In the second quarter last year, the company earned 22 cents a share.
"Our businesses continued to be adversely impacted by the weakened state of the manufacturing sector, characterized by significant overcapacity and persistently high raw material and energy costs," said Chief Executive John C. Hunter. "These factors have resulted in a decline in our integrated nylon business segment during the quarter and we unfortunately do not see the current operating environment improving significantly over the remainder of the year."
Quarterly results will be released on July 25.
In anticipation of weaker-than-expected second-quarter results, Solutia said it got an amendment granting the company relief from certain financial covenants in its $300 million revolving credit facility for the period June 30 through Sept. 29.
The company also said its financial results continue to be adversely influenced by the continued drain from certain litigation issues.