said it expects third-quarter underlying earnings to be below analysts' consensus estimate, due to higher raw-material costs and certain charges.
The specialty chemical maker expects to earn 11 cents a share, compared with 7 cents a share in the year-ago quarter. Analysts were expecting the company to earn 16 cents a share.
The underlying earnings exclude charges totaling $11 million, or 11 cents a share. Included in underlying earnings is the previously reported loss of $5 million, or 5 cents a share.
The charges partly reflect an agreement to pay
$20 million over three years to resolve a construction dispute. So far, $3 million from that payment reflects on the third quarter's earnings. The remainder of the charges are due to an $8 million pension settlement loss.
The $5 million loss was due to flooding and severe storms at the company's integrated Nylon facility in Texas.
Separately, the company said that U.S. and European authorities are investigating the rubber chemicals industry's past commercial practices and that Solutia's company Flexsys, a joint venture between Solutia and Akzo Nobel
, is being investigated. The company did not comment further.
Shares of St. Louis-based Solutia closed at $5.00 Thursday on the
New York Stock Exchange