Ashland 2Q Earnings Fall 54% On Charges; Results Top Views

Date : 04/27/2010 @ 7:06AM
Source : Dow Jones News
Stock : Ashland Global Holdings Inc. (ASH)
Quote : 66.49  -0.18 (-0.27%) @ 4:02PM

Ashland 2Q Earnings Fall 54% On Charges; Results Top Views

Ashland Global Holdings Inc. (NYSE:ASH)
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Ashland Inc.'s (ASH) fiscal second-quarter profit fell 54% on debt-issuance charges as results topped analysts' expectations and sales rebounded.

Chairman and Chief Executive James O'Brien said the results "reflect significant volume increases across our businesses, as well as the progress we have made in resizing our cost structure during the past two years."

Ashland has been selling assets in the wake of its $2.6 billion takeover of Hercules, using proceeds to reduce its heavy debt load. Worries over its debt pressure from the purchase, as a result, have receded. Two ratings agencies in March upgraded Ashland to the brink of investment grade on stronger demand and improved credit quality.

For the quarter ended March 31, Ashland reported a profit of $22 million, or 27 cents a share, down from $48 million, or 65 cents a share. Excluding accelerated amortization of debt-issuing costs and other impacts, earnings rose to $1.02 from 85 cents as revenue increased 13% to $2.25 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of 88 cents on revenue of $2.09 billion.

Operating margin rose to 6.72% from 5.63%.

Sales at Ashland's largest segment, water technology, rose 4%. Sales at the consumer business, which includes Valvoline, were up 6%, helping by a 16% increase in lubricant sales.

Ashland on Tuesday also announced it has completed debt refinancing, which will cut annual interest costs $50 million.

Shares closed Monday at $62.31 and didn't trade premarket. The stock has more than tripled in the past year.

-By Jodi Xu, Dow Jones Newswires; 212-416-3037; jodi.xu@dowjones.com

 
 

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