24.10.2014 04:04:50
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Olin Q3 Profit Down 63%, Results Miss View; Sees Weak Q4
(RTTNews) - Olin Corp. (OLN), a maker of chlor alkali products, on Thursday reported a 63 percent decline in profit for the third quarter from last year, reflecting lower sales at all three of its segment, particularly the Chlor Alkali products segment. Results for the quarter missed analysts' expectations.
Looking ahead, the company forecast earnings for the fourth quarter below Street estimates. The company's shares declined 6 percent in extended trades.
Joseph Rupp, Chairman and Chief Executive Officer of Olin said, "During the third quarter of 2014, the Chlor Alkali business experienced lower chlorine and caustic soda shipments and prices compared to the third quarter of 2013. Third quarter 2014 ECU netbacks declined compared to the third quarter of 2013 reflecting both lower chlorine and caustic soda prices."
The Clayton, Missouri-based company's third-quarter net income was $26.1 million or $0.33 per share, down from $69.7 million or $0.86 per share in the same period last year.
The latest quarter's results included $1.2 million of pretax restructuring charges and $9.5 million of pretax expense for the call premium and unamortized deferred debt issuance costs.
The prior-year quarter's results included $1.6 million of pretax restructuring charges, the net recovery of $11.4 million of pretax legacy legal costs, a pretax gain of $11.0 million for a favorable Chlor Alkali Products contract settlement and $8.8 million of favorable tax adjustments.
On average, eleven analysts polled by Thomson Reuters expected the company to earn $0.42 per share. Analysts' estimates typically exclude one-time items.
Sales for the quarter declined 11 percent to $593.6 million from $670.7 million last year. Analysts had a consensus revenue estimate of $617.23 million for the quarter.
Chlor Alkali Products sales for the quarter declined 12 percent from the prior-year period to $329.2 million. Chlorine and caustic soda volumes decreased 9 percent from last year and ECU netbacks declined about 11 percent.
Chemical Distribution sales were down 25 percent from last year to $76.6 million, reflecting the combination of lower caustic soda volumes and selling prices.
Winchester sales decreased 2 percent from the year-ago period to $209.6 million. Commercial sales declined, mainly due to a lower level of demand for shotshell and rifle ammunition.
Olin's board of directors declared a quarterly dividend of $0.20 on each share of Olin common stock. The dividend is payable on December 10, 2014 to shareholders of record at the close of business on November 10, 2014.
Looking ahead to the fourth quarter, Olin forecasts net income of $0.20 to $0.25 per share. Analysts currently expect the company to earn $0.33 per share for the quarter.
The company expects the fourth-quarter earnings to include pretax restructuring charges of about $1 million.
As a result of the continued weaker than expected chlorine and caustic soda demand and pricing, Olin revised its full-year adjusted EBITDA forecast to a range of $345 million to $365 million.
OLN closed Thursday's regular trading at $24.90, down $0.19 or 0.76 percent on a volume of 699,023 shares. In after-hours, the stock further declined $1.50 or 6.02 percent to $23.40.
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