A. Schulman Again Cuts Earnings Guidance

A. Schulman Inc. on Thursday slashed its earnings guidance for the year again, blaming "deteriorating market conditions facing the industry."

Shares in the company plunged 32% Thursday morning to $20.51.

The plastics manufacturer now expects 2016 adjusted earnings of $1.90 to $1.95 a share, reflecting a tough market environment in the company's largest regions in the U.S. and Europe. A. Schulman in March had cut its guidance to $2.40 to $2.45 a share, from its initial outlook for $2.80 to $2.85 a share.

"At the beginning of the quarter, our key end-markets in the U.S. and Europe did not present notable headwinds; however, as the quarter progressed we saw double-digit volume contraction," said Chief Executive Bernard Rzepka. "This softness has continued into August."

He said continued volatility in major raw materials due to lower oil prices "has created further caution in our customers and a reduction in orders."

"Unfortunately, the weak demand environment has overshadowed the positive impact of several cost reduction and synergy programs that we have been executing throughout the year," he said.

Mr. Rzepka said cash flow remains strong and the company is making strides in paying down debt, including an additional $18.2 million in July, helping push gross debt down 14% from its $1.1 billion peak last June.

The company is slated to report fourth-quarter and full-year results and provide fiscal 2017 earnings guidance after the market closes Oct. 26.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

August 11, 2016 10:45 ET (14:45 GMT)

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