OMNOVA Q3 Profit Misses View; Backs FY16 View For Significant Adj. EPS Growth

(RTTNews) - Specialty Chemicals firm OMNOVA Solutions Inc. (OMN) Thursday said it continues to expect 2016 to be another year of significant growth in adjusted earnings per share.

Moving forward, the Company expects that volume and profit growth will be driven by its specialty businesses through the introduction of innovative new products and the strengthened capabilities of OMNOVA's commercial team, as well as margin expansion from mix improvement, pricing actions and cost reductions.

For the third quarter, net income for the quarter was $4.7 million or $0.10 per share, compared to $0.4 million or $0.01 per share in the prior year period.

Adjusted net income was $6.4 million or $0.14 per share, compared to $5.9 million or $0.13 per share in the third quarter of 2015.

On average, three analysts polled by Thomson Reuters expected earnings of $0.17 per share for the quarter. Analysts' estimates typically exclude special items.

As anticipated, earnings for the quarter were negatively impacted, by approximately $1.2 million or $0.03 per share, due to country-wide labor strikes unrelated to the Company, which caused industrial shutdowns in France.

Net sales for the third quarter decreased 7.3% to $195.6 million from $210.9 million last year.

The largest contributor to the sales decline was from the divestiture of the non-strategic, break-even operation in India in February 2016. Excluding this divestiture, sales would have been down 4.3%.

Volume declined 2.2%, primarily related to Latin American nonwovens, coated fabrics for the Chinese automotive market and unfavorable conditions in the paper and carpet markets.

Pricing accounted for 1.3% of the decline, driven by index pricing tied to lower costs for certain raw materials.