Industry News

Engelhard Reports Fourth-Quarter Results

Published on 2004-02-04. Author : SpecialChem

ISELIN, NJ, February 3, 2004 - Engelhard Corporation (NYSE: EC) today reported net earnings for the fourth quarter ended December 31 of $63.7 million, or 50 cents per share, compared with $56.1 million, or 44 cents, for the same period in 2002. Fourth- quarter sales were $1.0 billion compared with $911 million a year ago.

Full-year net earnings were $234.2 million, or $1.84 per share, which included $4.9 million, or four cents per share, of net-positive special items. Earnings in 2002 were $171 million, or $1.31 per share, which included a charge of $57.7 million, or 44 cents per share. Sales for the year were $3.7 billion compared with $3.8 billion in 2002.

"New technology-based growth platforms and our companywide focus on productivity enabled us to deliver another year of solid financial results while continuing to fund R&D efforts for future growth," said Barry W. Perry, chairman and chief executive officer. "We grew earnings, generated excellent cash flow and posted solid returns without appreciable economic recovery in some core markets."

Fourth-Quarter Operating Results Operating earnings from Environmental Technologies were up 51% to $32 million. Sales rose 10% to $206 million on increased revenue from automotive and diesel markets. The increase in sales primarily resulted from favorable exchange rates and higher pass-through costs of substrates. The sharply higher earnings resulted from strength in mobile markets and the absence of costs in the year-ago quarter related to rework for power-generation applications.

Operating earnings from Process Technologies increased 5% to $33 million. Sales rose 4% to $167 million. Demand remained strong for new catalyst and additive technologies for petroleum refining as well as polyolefin catalysts. Demand from core chemical-process markets was below a strong year-ago quarter.

Operating earnings from Appearance and Performance Technologies declined 29% to $14 million. Sales were down 2% to $153 million. The declines were primarily the result of lower volumes of mineral-based products sold to the paper market plus higher energy costs.

Operating earnings from Materials Services declined to $1 million as expected, while sales were up 26% to $500 million. In spite of higher volumes, the low earnings resulted from reduced margins in sourcing metals for customers and a less favorable mix of metals in refining services.

Earnings from equity investments were $12 million, compared with $4 million a year ago, primarily reflecting gains from assets sold under favorable market conditions as part of the liquidation of the company's investment in a French-based, precious-metal- fabrication venture.

The company also benefited in the quarter from a lower than anticipated tax rate due to the favorable resolution of certain state income tax issues.

Performance Outlook "Our business plan calls for modest growth in 2004 with net earnings per share in the range of $1.80 to $1.90," Mr. Perry said. "We expect to overcome the absence of 15 cents per share of earnings delivered in 2003 by the French joint venture as well as continued weakness in several of our served markets. Growth from new technologies and our ongoing focus on productivity in our technology segments provide a strong underlying financial base, and we look ahead to the resumption of double-digit earnings growth beyond 2004."

Engelhard Corporation is a surface and materials science company that develops technologies to improve customers' products and processes. A Fortune 500 company, Engelhard is a world-leading provider of technologies for environmental, process, appearance and performance applications. For more information, visit Engelhard on the Internet at www.engelhard.com.

Source: Engelhard Corporation

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