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WRAPUP 2-Chemical makers post big sales declines; see recovery
Thu Aug 6, 2009 3:21pm EDT
* Koppers, PolyOne profit beat estimates
* Huntsman, OM Group miss view
* Huntsman, PolyOne see demand improving in Asia
* Huntsman, PolyOne, Koppers, OM Group shares down. (Recasts, add details about Huntsman, analyst comments)
Aug 6 (Reuters) - Four U.S. chemicals makers reported significant declines in sales as the global recession strangled demand from their key markets, but indicated that demand was recovering.
"We believe we have seen the worst of this recession," Huntsman Corp's (HUN.N: Quote, Profile, Research, Stock Buzz) Chief Executive Peter Huntsman said on a conference call with investors.
"We are seeing our Asian business improve nicely and we are seeing early signs of recovery in some sectors in Europe and North America," he added.
But, Huntsman shares were trading down as its adjusted results fell short of Wall Street forecasts. [ID:nN05257944]
However, Longbow Research analyst Dmitry Silversteyn said he is not looking for a quick recovery to the revenue levels seen in 2007 and 2008.
"I think it will be many years before we get to that level of demand," he added.
Nevertheless, PolyOne Corp's (POL.N: Quote, Profile, Research, Stock Buzz) Chief Executive Stephen Newlin echoed Huntsman's sentiment and said he was also encouraged by the accelerated activity in Asia and modest increases in sales in Europe and North America in the quarter.
PolyOne saw its net profit slide by more than half to $3.5 million, or 4 cents a share, but comfortably beat analysts' breakeven estimate. [ID:nWNBB0707].
Additionally, PolyOne's Chief Financial officer said the recent housing and auto data suggest that those markets may have reached a bottom. U.S. construction spending rose more than expected in June, and demand for U.S. home loans also rose last week as a decline in fixed mortgage rates boosted applications for refinancing. [ID:nN03512640]
In addition, U.S. auto sales jumped to their highest level for the year in July. [ID:nN03530480]
OM Group Inc (OMG.N: Quote, Profile, Research, Stock Buzz) also said that the company is seeing some positive, near-term trends in the business, although it posted a surprise second-quarter loss. [ID:nBNG277380]
"Volumes in many of our end markets, most notably printed circuit board and semiconductor, improved sequentially from the first quarter of 2009 to the second quarter, and continue to do so in the third quarter," OM Group's chief executive Joseph Scaminace said in a statement.
However, Koppers Holdings Inc (KOP.N: Quote, Profile, Research, Stock Buzz) remained guarded on its outlook.
"I expect that end-market demand, although stabilizing, will remain soft. We believe these operating conditions will continue on our way to the end of this year or most probably end of 2010," Koppers Chief Executive Walter Turner said in a conference call.
Earlier in the day, Koppers posted adjusted second-quarter earnings that topped analysts forecast helped by lower costs. [ID:nWNBB0828]
"I think it is encouraging that most of them have remained profitable at those levels of demand, through the very aggressive actions of reducing costs," Longbow's Silversteyn.
Shares of Huntsman were down 12 percent at $6.45 in afternoon trade, while Koppers Holdings fell 8 percent to $26.17, Thursday on the New York Stock Exchange.
OM Group also dropped 12 percent to $30.60, while PolyOne was down 1 percent at $4.47 Thursday. (Reporting by Hezron Selvi, Arundhati Ramanathan and Antonita Madonna Devotta in Bangalore, Ernest Scheyder in New York; Editing by Anil D'Silva)
