Updated from 8:55 a.m. ET
said Monday that its third-quarter profits fell 62%, due primarily to higher costs for energy and raw materials and price pressures on some of its chemical products, but the results still beat revised earnings expectations.
Union Carbide, which is being acquired by
, said net income fell to $29 million, or 22 cents per share for the third quarter, which ended Sept. 30, compared with $77 million, or 58 cents a share in same period a year ago. The 1999 third quarter earnings included a gain of 21 cents per share from a litigation settlement.
The company had
warned earlier this month that its earnings would be around 20 cents a share, sharply lower than the consensus Wall Street estimate of 57 cents-a-share earnings for the company, according to
First Call/Thomson Financial
. Since then, the average estimate among analysts surveyed by First Call/Thomson Financial has dropped to 20 cents a share.
Third quarter net sales totaled $1.64 billion, up about 9% from sales of $1.5 billion in the third quarter of 1999.
In a statement, Union Carbide's Chairman and CEO William H. Joyce said the company's earnings were hurt by higher costs for raw materials and energy, and said those costs are likely to increase in the fourth quarter.
Joyce also warned that sales of the company's basic chemical and polymer products -- including ethylene glycol, used in automotive antifreeze, and polypropylene, a popular plastic material -- are likely to be lower than in the third quarter, despite price increases in selected products. Union Carbide reported an operating loss of $15 million in the basic chemical and polymer product segment for the third quarter, more than double the $7 million loss reported for the same year-ago period.
Higher costs also hurt Union Carbide's specialty and intermediate products business, which includes solvents and other chemicals and polymers used in industrial lubricants and other products. The company's specialty and intermediate products segment reported an operating profit of $45 million for the third quarter of 2000 -- less than half last year's profit of $96 million (before a gain from litigation of $38 million). But Joyce said the business should benefit from modest margin improvement in a number of product lines during the fourth quarter.
Dow Chemical, which is in the process of acquiring Union Carbide, announced third-quarter
earnings last week of 48 cents a share, beating the First Call/Thomson Financial estimate of 44 cents and in line with year-ago earnings.
Union Carbide finished up $4.81, or 13%, at $41.56, while Dow finished up $3.13, or 11%, at $30.56.