Ashland Shares Rally On Return To Profit

Date : 01/26/2010 @ 12:16PM
Source : Dow Jones News
Stock : Ashland Global Holdings Inc. (ASH)
Quote : 123.5  -0.19 (-0.15%) @ 4:01PM

Ashland Shares Rally On Return To Profit

Ashland Global Holdings Inc. (NYSE:ASH)
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   By Jim Jelter 
 

Shares of Ashland Inc. (ASH) surged more than 10% early Tuesday after the specialty chemical maker reported a convincing return to profitability in its fiscal first quarter.

For the three months ended Dec. 31, Ashland posted income of $86 million, or $1.10 a share, reversing a year-ago loss of $119 million, or 73 cents a share.

The results reflect aggressive cost-cutting over the past year and incorporate earnings from Ashland's acquisition of fellow chemical maker Hercules, which it completed Oct. 1. The year-ago quarter included one-time items that knocked $1.98 a share from its bottom line, making the year-on-year comparisons even more dramatic.

Sales for the latest quarter rose to $2.02 billion from $1.97 billion.

Excluding one-time items, the company's operating income from continuing operations was 97 cents a share, easily topping the 73 cents analysts polled by FactSet Research had expected.

Ashland shares, which initially rose 10.5% on the news, were recently trading at $43.15, up $3.52, or 8.9%

"Modest growth in underlying demand, gross margin increases in all of our commercial units, and our continued focus on cost reductions contributed to this improved performance," said Chief Executive James O'Brien.

"Each of our businesses is currently showing some signs of demand improvement and stable or improving margins. Although raw material cost increases may well occur during the fiscal year, our continued emphasis on pricing and cost management should support both increased profitability and growth as the economy recovers," he added.

Shares of the Covington, Ky.-based company are up a whopping 358% over the past 12 months from a low of $5.35 in early March 2009.

-By Jim Jelter; 415-439-6400; AskNewswires@dowjones.com

 
 



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