Rohm and Haas Company (ROH) announced on Monday that its fourth-quarter earnings fell to $32 million or 17 cents per share from $180 million, or 91 cents per share from a year ago.
Excluding one-time charges, most of which were related to a corporate restructuring that was announced last month, the company said it would have earned 69 cents per share for the quarter.
Sales fell 13 percent to $2.34 billion. The maker of specialty chemicals saw sales in six of its eight business units, and all five of its geographic regions dropped during the period, underscoring the weakening economy.
Analysts polled by Thomson Reuters were expecting Rohm and Haas to earn 67 cents in the quarter on revenue of $2.23 billion.
A Gabelli & Co. analyst said the results reflect a significant drop in volume that plagued the entire industry during the quarter, but noted that Rohm & Haas’ results were slightly better than its peers.
Chairman and CEO Raj L. Gupta said the company took proactive steps throughout the year to remain competitive despite the challenges of a slowing economy and the company’s performance reflected those efforts.
“As market conditions continue to weaken, we are implementing additional actions to navigate these difficult times, while remaining focused on positioning our businesses for success when markets recover,” he said.
Rohm & Haas has interests in a wide array of industries, including building and construction, electronics and electronic devices, household goods and personal care, packaging and paper, transportation, pharmaceuticals, water, food and industrial process.
The widening recession has hurt demand for many of its goods, not just here in the U.S. but in developing economies that were once large drivers of growth for the entire sector.
Of the two business units that did improve sales in the fourth quarter, just one, its iconic Morton Salt division, saw organic growth due to harsh winter weather in North America. The other, its display technologies unit — which makes parts for liquid crystal televisions — was helped by an acquisition last summer.
Dow Chemical’s takeover bid of Rohm & Haas remains on hold. In July a deal was reached for Dow to acquire the company for $15.3 billion as it looked to expand its specialty chemical business. But a joint venture with Kuwait fell apart at the last minute and the funds from that $17.4 billion deal were to help fund the Rohm deal.
Rohm & Haas subsequently sued Dow arguing that Dow has no legal basis to walk away from the deal. Rohm & Haas continues to believe that a merger between the two will create a strong global competitor to benefit shareholders and stakeholders in the long term, and that Dow has the resources and flexibility to live up to its obligations under the merger agreement. A trial on the matter is scheduled to begin on March 9.
This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.
