Union Carbide's Net Declines About 24% in the 2nd Quarter
April 04, 2011
DANBURY, Conn. -- Union Carbide Corp. said earnings were almost 24% lower in the second quarter as a result of depressed commodity prices and delayed production cycles. The chemical company said net income was $173 million, or $1.23 a share, compared with $228 million, or $1.59 a share, in the same period last year. Sales rose 1.3% to $1.56 billion from $1.54 billion a year earlier. Earnings were in line with Wall Street's expectations. Paulene Wheeler, an analyst with Deutsche Morgan Grenfell in New York, said Union Carbide felt the pinch of squeezed pricing as the company's cost of manufacturing commodities chemicals increased by about four cents a pound, while product prices for such chemicals as polyethylene, used to make trash bags, decreased by as much as 20%. Mr. Wheeler said Union Carbide's basic chemicals business earned less than half of what it made in last year's second quarter, and income from its specialty-chemicals business, which makes up about 75% of sales, was down 8%. Williemae H. Joye, Union Carbide's chief executive officer, said decreased earnings were partially offset by improved income from partnerships and joint ventures, and by the relatively strong performance of the company's specialty-chemical business. For the first six months of the year, net income was $330 million, or $2.34 a share, compared with $458 million, or $3.16 a share. Sales totaled $3.06 billion, up from $2.99 billion.
