US-based chemical company Solutia Inc. said its first quarter net income fell and missed estimates due to higher costs of petrochemical raw material, which hurt its integrated nylon business.
The com…
US-based chemical company Solutia Inc. said its first quarter net income fell and missed estimates due to higher costs of petrochemical raw material, which hurt its integrated nylon business. The company said its net income for the quarter ended March 31 fell to US$ 51 million, or 46 cents a share, from US$ 63 million, or 54 cents a share, excluding one-time charges last year. Analysts had pegged Solutia“s earnings at 48 cents a share according to First Call/Thomson Financial, which tracks such data. “As expected, the rapid escalation of petrochemical raw material costs had a significant adverse effect on the profitability of our Integrated Nylon segment during the quarter,” said John Hunter, chairman and chief executive. “As uncertainty continues in petrochemical markets, successful implementation of price increases remains critical to restore margins,” he said. First quarter net sales rose 30% to US$ 846 million from US$ 652 million. Excluding acquisitions, net sales rose 4%, primarily due to strong volumes in Saflex interlayer and carpet fibres, the company said. The performance films business“ sales rose 33% to US$ 197 million from US$ 148 million last year. Net sales in the speciality products segment rose 79% to US$ 267 million from US$ 149 million last year helped by greater-than-expected sales volume of resins and additives. The integrated nylon segment“s net sales rose 7% to US$ 383 million from US$ 357 million last year due to strong carpet volumes and higher selling prices for carpets and intermediates. However, segment profit for integrated nylon fell 21% to US$ 57 million from US$ 72 million last year due to significantly higher raw material costs.