Ashland reports sharp increase in Q3 earnings per share
25 Jul '07
4 min read
Ashland believes the use of these adjusted operating incomes is appropriate to enhance understanding of its current and future performance. Net interest and other financing income for both the June 2007 and 2006 quarters amounted to $9 million. Income taxes for the June 2007 quarter of $15 million compare with $14 million in the prior-year quarter.
The effective tax rate was 15 percent for the 2007 quarter versus 25 percent for the 2006 quarter. The lower effective tax rate for the 2007 quarter reflects both updated estimates of taxable income for the full year and favorable developments with respect to settlements of certain tax matters.For the fourth fiscal quarter, Ashland estimates an effective tax rate of about 21 percent and for the full year, 23 percent.
"Our quarterly results continued to be driven by the strong performance of Valvoline," said James J. O'Brien, chairman and chief executive officer. "Ashland Performance Materials produced its second-best quarterly operating income ever, exceeded only by the all-time record set in last year's third quarter."
"Water Technologies achieved better quarter-versus-quarter operating performance, excluding the currency hedge gain recorded in the June 2006 quarter. Ashland Distribution continued to experience unfavorable market conditions, while realigning its plastics supplier base, resulting in lower operating income."
Performance Materials earned operating income of $33.3 million for the June 2007 quarter, 19 percent below the record $40.9 million earned in the prior-year June quarter. Growth in international business partially offset the weakness in Performance Materials' key North American markets.
While volume was flat as compared with the June 2006 quarter, revenue of $400 million increased 8 percent. Excluding acquisitions, volume declined 2 percent and revenue grew 5 percent.
Distribution's operating income declined to $11.6 million for the June 2007 quarter as compared with $30.1 million in the same year-ago quarter. Gross profit as a percent of sales declined to 7.1 percent from 9.3 percent in the prior-year quarter.
Distribution's performance reflects the weak U.S. manufacturing economy, rapid cost increases in commodity chemicals, and the impact of the termination of a significant North American plastics-supply contract in the March 2007 quarter. Revenue decreased 2 percent from $1,050 million in the June 2006 quarter to $1,026 million in the 2007 quarter, and volume declined 2 percent.
marketing@alchempro.com
