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PolyOne Updates Fourth Quarter Outlook

Published on 2008-12-24. Author : SpecialChem

CLEVELAND -- PolyOne Corporation updated its outlook for the fourth quarter of 2008.

Revenues are projected to decline approximately 15 percent in the fourth quarter of 2008 compared to the fourth quarter of 2007 due to a significant reduction in demand. Despite the precipitous decline in fourth quarter sales volume, gross margin improvement is expected to result in operating income excluding special items that approximates prior year operating income before special items. This updated outlook for operating income before special items represents an improvement from the Company's prior guidance provided in November.

Special items for the fourth quarter will include a charge of approximately $65 million to record a valuation allowance against U.S. deferred tax assets. The Company recently completed its planning process and as a result now expects that lower housing and auto demand, incremental pension expense, and restructuring costs will lead to a pre-tax loss in the U.S. in 2009. The Company's international operations are expected to be profitable in 2009. The valuation allowance is a non-cash charge and will have no impact on PolyOne's cash flow, liquidity, or credit facilities. Further, the Company expects that it will have sufficient U.S. profitability during the tax-loss carry-forward period to realize substantially all of the benefits of the deferred tax assets.

Commenting on the outlook, Stephen D. Newlin, chairman, president and chief executive officer said, "While we are pleased with the improved short term outlook for operating income before special items, we recognize that the recent demand decline presents a challenging scenario for 2009." Newlin continued, "In light of this, we will implement additional cost reduction actions, which we expect to discuss in greater detail when we announce our 2008 year-end results on February 5, 2009."

Newlin further added, "In connection with our quarterly earnings releases, we will continue to host conference calls to review historical results. However, we plan to discontinue the practice of providing earnings guidance and intra-quarter updates."

About PolyOne:

PolyOne Corporation, with annual revenues of more than $2.7 billion, is a premier provider of specialized polymer materials, services and solutions. Headquartered outside of Cleveland, Ohio USA, PolyOne has operations around the world.

Forward-looking Statements

In this press release, statements that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. They use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance and/or sales. Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; continued or worse than expected degradation in the North American residential construction or automotive market; continued or worse than expected decline in business conditions in Europe and Asia; the financial condition of our customers, including the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability; the effect on foreign operations of currency fluctuations, tariffs, and other political, economic and regulatory risks; changes in polymer consumption growth rates in the markets where PolyOne conducts business; changes in global industry capacity or in the rate at which anticipated changes in industry capacity come online; fluctuations in raw material prices, quality and supply and in energy prices and supply; production outages or material costs associated with scheduled or unscheduled maintenance programs; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; an inability to achieve or delays in achieving or achievement of less than the anticipated financial benefit from initiatives related to cost reductions and employee productivity goals; an inability to raise or sustain prices for products or services; an inability to maintain appropriate relations with unions and employees; and other factors affecting our business beyond our control, including, without limitation, changes in the general economy, changes in interest rates and changes in the rate of inflation. The above list of factors is not exhaustive.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any further disclosures we make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we provide to the Securities and Exchange Commission.

Source: PolyOne


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