Chemical Finance Digest, Oct. 24-28
4:30 PM MDT | October 31, 2011 | By VINCENT VALK
Topping the headlines last week, third-quarter at U.S. basic and diversified firms earnings were generally solid despite slowing growth. The story was similar elsewhere. In Europe, sales rose, though raw material prices put pressure on margins. BASF beat estimates and reiterated a positive outlook for the rest of the year. Oil majors’ chemical businesses reported mixed earnings.
Outside earnings, Rentech Nitrogen Partners, the nitrogen fertilizer arm of Rentech, announced plans for an IPO. The business is planning to offer 15 million shares at $19-$21/share.
In M&A news, Brenntag joint venture Crest Chemicals has acquired assets in South Africa, while a New Zealand polymer resins maker has acquired a Bayer subsidiary for $106 million.
In debt news, Air Product is issuing $300 million in new debt due 2021. The proceeds will be used to reduce short-term debt, and the issue is rated ‘A’ by Standard & Poor’s and ‘A2’ by Moody’s.
In macroeconomic news, U.S. GDP rose 2.5% in the third-quarter, the largest increase in a year. “The third-quarter evidence argues for a ‘weak-growth’ outlook, not recession, and the mix of growth makes prospects for the fourth quarter look a little brighter. The lack of inventory building in the third quarter suggests that production may need to accelerate to keep pace with sales,” says IHS Global Insight chief economist Nigel Gault. IHS Global Insight now expects fourth-quarter GDP growth to be closer 2% than the 1% previously forecast.
The week ahead will see the release of the U.S. employment situation for October on Friday. Consensus is for about 90,000 new jobs.
The week will also see the following earnings reports from chemical firms:
Tuesday: Chemtura, Amyris, Westlake
Wednesday: CF Industries, Huntsman, Nalco, Arch Chemicals
Thursday: Agrium, Georgia Gulf