Chemical industry weekly news roundup, 25 April
10:32 AM MDT | April 25, 2014 | By LINDSAY FROST
This Week in CW:
Earnings season was in full swing this week as several major companies reported mixed results. Dow Chemical reported higher first-quarter profits, driven by gains in most segments as well as productivity and cost-control actions. Adjusted earnings of 79 cts/share increased 14% year-on-year (YOY), easily beating the analysts’ consensus estimate of 70 cts/share. DuPont’s first-quarter operating earnings of $1.5 billion were up 1% year-on-year (YOY), as weaker agriculture results offset gains in other segments. Operated earnings of $1.58/share were up 1% from the year-ago quarter. PotashCorp reported net income of $340 million for its first quarter, down 38% year-over-year (YOY), with earnings per share of 40 cts/share, rising above analyst estimates of 36 cts/share, according to Thomson Reuters (New York). Eastman announced its first quarter results, with net income dropping 6% year-on-year (YOY), to $233 million. Reported adjusted earnings of $1.61/share were 1 ct below the year-ago quarter but above analyst estimates of $1.58/share, according to Thomson Reuters (New York). W.R. Grace says extreme weather during the first quarter that negatively impacted North American construction activity and caused manufacturing closures at a Maryland refinery catalysts production site contributed to a year-on-year (YOY) drop in profits. The company reports net income of $50.1 million for its fiscal first quarter, down 15.2% YOY. Air Liquide has reported €3.73 billion ($5.16 billion) in revenue during the first quarter, up 6.2% year-on-year (YOY) on a comparable—growth, excluding currency, natural gas, and significant M&A impacts—basis or 1% on a reported basis. Shin-Etsu Chemical reported a 7.5% rise in net profits for the fiscal year ended 31 March 2014 compared with the previous fiscal year, to ¥113.61 billion ($1.1 billion). Full-year sales increased 13.7%, to ¥1.16 trillion. Sabic reported a drop in first quarter earnings and said that a shortage of natural gas was limiting its domestic growth. Net profit was down 1.8% to 6.44 billion Saudi riyals ($1.72 billion)
BASF says it is "implementing a series of measures" within its nutrition and health division, aimed at strengthening the competitiveness of its performance products segment. The company says that it is adjusting its product portfolio to "better meet changing customer needs and regional demands." About 260 jobs are to be eliminated globally by the end of 2015 as part of the restructuring, BASF says. The job losses will be in production, marketing, and administration, according to BASF. The company says it is consulting with the responsible employee representatives. The nutrition and health division encompasses products for human and animal nutrition, flavors and fragrances, and products for the pharmaceutical industry.
Air Products told investors on its earnings call 23 April that the search for its next CEO continues. Air Products announced last September that current CEO John McGlade will retire this year as part of an agreement with its largest investor, activist hedge fund Pershing Square (New York). The agreement with Pershing Square requires McGlade to step down as Air Products chairman and from the board by 30 June.
Around the Web:
The United Nations Intergovernmental Panel on Climate Change released two of its Working Group reports at the end of last month (WGI and WGIII), and their short discussion of biofuels has ignited a fierce debate as to whether they’re of any environmental benefit at all, according to an editorial in Forbes. The report lists many potential negative risks of development, such as direct conflicts between land for fuels and land for food, other land-use changes, water scarcity, loss of biodiversity and nitrogen pollution through the excessive use of fertilizers. With more than 60 nations having biofuel mandates, the competition between ethanol and food has become a moral issue, according to Forbes contributor James Conca.
Most chief executives globally would support the publication of country-by-country financial information to help stamp out corporate tax avoidance, Reuters cites from PircewaterhouseCooper’s annual CEO survey of 1,344 chief executives across the world. Campaigners have advocated requiring multinational companies to disclose country-by-country information as part of reforms of international tax rules, but the measure is opposed by many big business groups and governments. 59% of respondents in the survey agreed multinationals "should be required to publish revenue, profit and tax disclosures on a country-by-country basis.”
Bloomberg says politicians and regulators have exerted pressure on banks to cut back their commodities business. Goldman Sachs Group Inc. (GS), whose three top executives began their careers at the firm in the commodity-trading unit, is poised to gain market share as pressure from regulators drives competitors to scale back. Barclays Plc (BARC), the UK’s second-largest bank, said that it’s exiting commodities businesses other than trading precious metals and derivatives tied to oil, US gas and commodity indexes. JPMorgan Chase & Co. (JPM) last month announced the $3.5 billion sale of its raw-materials trading unit to Mercuria Energy Group Ltd. and Morgan Stanley plans to sell its physical oil business to Russia’s OAO Rosneft.
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