Chemical industry weekly news roundup, 26 July
1:56 PM MDT | July 26, 2013 | By LINDSAY FROST
This Week in CW:
Earnings season is in full swing as companies began to report mixed results—though crop protection seems to be the bright spot. Dow Chemical reported higher second-quarter profits, driven by an advantaged feedstock position in North America, strong adoption of corn seeds and new crop protection products by farmers, and previously announced cost-cutting programs. Adjusted earnings of 64 cts/share were up 16% YOY, narrowly beating a 63 cts/share consensus of analyst estimates compiled by Thomson Reuters (New York). BASF reported a 4.2% decline in second-quarter net income to €1.16 billion ($1.53 billion) on 2.9% higher sales at €18.35 billion. The company cites increased tax expenses and higher minority interests in profits for the lower net income. Ashland reported fiscal third-quarter income from continuing operations down 26.9% year-on-year (YOY), to $117 million, on sales down 4%, to $2.1 billion. The company has also announced that intends to sell its elastomers business, and is “exploring options,” including a possible sale, for its water technologies business. Praxair says that net income increased 4% year-over-year (YOY), to $445 million. Reported earnings were $1.49/share, in line with analyst estimates as reported by Thomson Reuters (New York).
DuPont says it is exploring the sale or spin-off of its $7-billion/year performance chemicals unit as part of its transformation to a “higher growth, less cyclical company.” DuPont’s decision to exit performance chemicals segment follows the sale of its automotive coatings business earlier this year and the acquisition of Danisco, in 2011. Options being considered include a full or partial separation of each of these businesses through a spin-off, sale, or other transaction, the company says.
Air Products has adopted a stockholder rights plan, or so called ‘poison pill,’ noting “unusual and substantial activity” in its shares. The plan will be triggered if a person or group acquires 10%, or 20% in the case of institutional investors, of the company’s common stock. The company also reported that net income for the quarter ended 30 June fell 59%, to $288 million year-on-year (YOY), on sales up 9%, to $2.5 billion, because of acquisitions, including liquid carbon dioxide firm EPCO in June, and higher energy cost pass-through.
Around the Web:
According to phys.org, a major new technology has been developed by The University of Nottingham, which enables all of the world's crops to take nitrogen from the air rather than damaging fertilizers. Professor Edward Cocking, Director of The University of Nottingham's Centre for Crop Nitrogen Fixation, has developed a unique method of putting nitrogen-fixing bacteria into the cells of plant roots. His major breakthrough came when he found a specific strain of nitrogen-fixing bacteria in sugar-cane which he discovered could intracellularly colonise all major crop plants.
A recent article in the NY Times says US consumer sentiment rose in July to the highest level in six years as Americans felt better about the current economic climate, though they expected to see a slower rate of growth in the year ahead, a survey released on Friday showed. The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment climbed to 85.1 from 84.1 in June, topping expectations for 84. It was the highest level since July 2007.
A polar thaw has opened a shortcut for Russian natural gas, the NY Times says, and Russian energy company Novatek is taking advantage. Novatek, in partnership with the French energy company Total and the China National Petroleum Corporation, is building a $20 billion liquefied natural gas plant on the central Arctic coast of Russia. It is one of the first major energy projects to take advantage of the summer thawing of the Arctic caused by global warming. The plant, called Yamal LNG, would send gas to Asia along the sea lanes known as the Northeast Passage, which opened for regular international shipping only four years ago.