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October 1, 2001
Volume 79, Number 40
CENEAR 79 40 p. 16
ISSN 0009-2347
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Some chemical companies see hopeful signs, but not enough to spur growth


Chemical companies have begun to issue "guidance" on third-quarter earnings, and most of that guidance gives little hope for a turnaround in industry fortunes anytime soon.

At PPG Industries, Chairman and CEO Raymond W. LeBoeuf told employees that third-quarter earnings per share would be 50 to 60 cents, compared with 88 cents in the third quarter of last year. LeBoeuf noted that recent announcements of rising unemployment, the spread of economic weakness globally, and plans by auto companies to reduce production "support our belief that meaningful improvement in the global economy this year is unlikely." He added, "The tragic events of Sept. 11 only add to the uncertainty."

In a terse statement, Dow Chemical said that it no longer expects to meet its previous earnings estimate of 25 to 35 cents per share since, in light of weak economic conditions, "expectations for increased demand in September will not materialize."

Some companies see a brighter side. Georgia Gulf expects earnings of 7 to 9 cents per share, exceeding analysts' estimates of 6 cents. In the second quarter, it had a loss of 9 cents per share. The company says weak third-quarter demand will result in lower sales volumes and prices, but that these will be more than offset by lower natural gas costs.

Rohm and Haas is comfortable with analysts' estimates of 23 cents per share. Chairman and CEO Rajiv L. Gupta says continued softness in the electronic materials business is being balanced by a combination of gains in some performance materials businesses, lower spending across the company, and lower interest expenses. Gupta says most of the company's businesses are still reporting demand below last year's levels, but adds that demand is returning to more seasonal patterns in all but the electronics industry.

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Copyright © 2001 American Chemical Society

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