OM Group 4Q Profit Falls on Tough Comps
Thursday February 28, 12:38 pm ET
OM Group Posts 16 Percent Drop in 4th-Quarter Profit, but Beats Wall Street Estimates
CLEVELAND (AP) -- Specialty chemicals company OM Group Inc. said Thursday its fourth-quarter profit fell 16 percent on tough comparisons to a prior-year quarter boosted by profit from a nickel business that was later sold.
OM Group earned $48 million, or $1.58 per share, compared with $56.8 million, or $1.93 per share, for the same quarter in 2006.
The prior-year period included a profit from discontinued operations of $73.8 million related mainly to the operations of the company's nickel business, which was sold in the first quarter of 2007.
OM posted a profit from continuing operations of $46.4 million, or $1.53 per share, compared with a loss from continuing operations of $17 million, or 58 cents per share, in the 2006 period.
Analysts polled by Thomson Financial expected a profit from continuing operations of $1.30 per share.
OM credited the increase in earnings from continuing operations to higher operating profit, lower interest expense, higher interest income and favorable foreign currency exchange gains.
Revenue rose 80 percent to $309.4 million from $172.1 million in the year-ago period.
OM said increased product selling prices, strong demand across most of the company's end markets, and the resale of cobalt metal drove the increase in sales.
The average cobalt reference price in the fourth quarter of 2007 was $32.68, up from $18.66 in the 2006 quarter, OM said.
For the full-year 2007, OM earned $246.9 million, or $8.15 per share, compared with $216.1 million, or $7.31 per share, in 2006. Revenue rose to $1.02 billion from $660.1 million the year before.
OM Group shares fell 98 cents to $61.88 in midday trading.
