|NEWS OF THE WEEK
Volume 79, Number 18
CENEAR 79 18 pp. 9
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As expected, earnings in the first quarter fell at most major U.S. chemical companies. Of 16 companies surveyed by C&EN, only three--Monsanto, NL Industries, and Praxair--improved over the same period last year. And earnings declines at the remaining 13 companies are all in the double digits, with nine having downward movement greater than 30%.
Praxair, the largest company with an earnings rise, saw earnings improve 11% to $126 million. Chairman and Chief Executive Officer Dennis H. Reilley says, "Despite weak demand for industrial gases in the U.S., our strong business portfolio delivered record results," driven by significant price increases, good demand growth outside the U.S., and improved earnings in the company's high-performance coatings application business.
DuPont had its own problems, causing earnings to fall 37% to $567 million. One of the problems was the pharmaceuticals unit, which DuPont already had put up for sale; it accounted for about one-third of the earnings decline due to lower sales as wholesalers continued to reduce inventories.
PPG Industries, with a 27% decline in earnings to $127 million, is just one of the companies taking steps to counter the downturn. Chairman and CEO Raymond W. LeBoeuf says, "Likelihood of the difficult economy in which we now find ourselves became clear to us more than seven months ago." Thus PPG has taken a $71 million after-tax restructuring charge, which is not included in the $127 million in earnings. According to LeBoeuf, about two-thirds of this charge reflects a workforce reduction of nearly 1,500 people, or about 4% of the company's worldwide employment.
W.R. Grace, which filed for Chapter 11 bankruptcy protection earlier this month, had earnings decline 40% to $14.6 million as sales increased 3% to $396 million. Chairman, President, and CEO Paul J. Norris says, "Our decision on April 2 to seek Chapter 11 protection as a way to define and resolve asbestos-related claims was executed with no disruption to our customers. We continue to remain focused on growth and productivity and are anticipating a stronger second half of the year."
Chemical & Engineering News