Huntsman Posts Loss
Huntsman Posts Loss as Results Miss Expectations
Costs hurt but revenue in pigments and additives nearly doubles following Rockwood Holdings acquisitions
Feb. 18, 2015 6:41 a.m. ET
Huntsman Corp. reported higher revenue in the most recent quarter because of benefits of a recent acquisition, but the company swung to a loss because of higher costs.
The results missed analysts’ expectations.
The report comes as Huntsman, which makes insulation, pigments and coatings, is restructuring much of its business with an eye on boosting savings and raising profit. In December, the chemical company said it would cut 900 jobs in its pigments and additives business, aiming to save about $130 million a year by mid-2016.
The job cuts followed the company’s $1.1 billion acquisition in October of the performance additives and titanium dioxide businesses from Rockwood Holdings Inc. Huntsman, whose sales have rebounded of late, has also completed restructuring its materials and textile effects units.
Revenue growth in the most recent quarter was driven by an increase in the pigments and additives unit, which nearly doubled its revenue as it benefited from the Rockwood acquisitions.
The other segments posted declines, however. The textiles division’s revenue fell about 3% during the quarter, and the polyurethanes division, the company’s biggest by sales, posted a decline of about 2%. Performance products revenue slipped by about 4%.
Overall, Huntsman posted a quarterly loss of $38 million, or 16 cents a share, compared with a year-earlier profit of $41 million, or 17 cents a share. Excluding certain items, per-share earnings fell to 33 cents from 48 cents.
Revenue improved 9.1% to $2.95 billion.
Analysts had projected 37 cents a share in earnings and $2.97 billion in revenue, according to Thomson Reuters.
The company’s gross margin slipped to 15.2% from 16.5% as input costs jumped 11%. Operating expenses climbed 12%, and restructuring, impairment and plant-closing costs climbed 63%.
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