COVINGTON, Ky. (AP) â¿¿ Ashland Inc. said Tuesday its net income fell by 38.4 percent in the company's first fiscal quarter on weaker margins in its consumer markets and water technologies businesses. The Covington, Ky. specialty chemical company reported earnings of $61 million, or 77 cents per share, for the three-month period ended Dec. 31. That compares with $99 million, or $1.25 per share, for the same part of 2010. Revenue increased 34.7 percent to $1.93 billion. Excluding special items including worker severance packages related to a cost reduction program, Ashland said it earned $95 million, or $1.20 per share, in the period. Analysts, who typically exclude special items when forecasting company financial results, had expected earnings of $1 per share on revenue of $1.99 billion in the quarter, according to FactSet. Ashland said its consumer markets business, which sells packaged automotive lubricants, chemicals, appearance products, antifreeze and filters, struggled to pass on the cost of raw materials. The segment posted $56 million in earnings before interest, taxes, depreciation, and amortization, down 26 percent from the same period in 2010. Its water technologies business, which supplies chemicals to numerous industries including mining, food and beverage, packaging, and printing, suffered from lower sales volumes. The segment's $40 million in earnings before interest, taxes, depreciation, and amortization was down 18 percent from the prior-year quarter. The company's specialty ingredients and performance materials businesses enjoyed higher profit margins from the same period last year.