Chemtura Corp. Says Third Quarter Earnings Will Fall Short of Expectations
Posted on: Wednesday, 21 September 2005, 21:00 CDT
Sep. 22--The price of shares in Middlebury, Conn.-based Chemtura Corp. rebounded Wednesday after falling almost 23 percent on Tuesday in the wake of the company's warning that third-quarter earnings would fall short of Wall Street expectations.
Chemtura predicted earnings of about 10 cents per share for the quarter before merger-related costs and other charges, sharply below the 18 to 20 cents per share forecast by analysts. The 10 cents per share estimate reflects about $40 million in lower-than-expected operating income.
Chemtura shares, which opened Tuesday at $15.17 per share on the New York Stock Exchange, fell $3.47 to $11.70 by the close of trading. The stock reached a 52-week high of $17.95 in August. The stock rallied Wednesday to close at $11.91, a gain of 21 cents.
Chemtura was formed by the $1.8 billion merger of Crompton Corp. and Great Lakes Chemical Corp. in July.
The company said "major shortfalls" in former Great Lakes businesses -- including consumer products, polymer stabilizers, flame retardants and fluorine -- will contribute to more than 60 percent of the shortfall. Weaknesses in the company's plastic additives, rubber chemicals, petroleum additives and farm chemicals businesses were also factors, the company said.
About 15 percent of the lower earnings stems from direct costs associated with Hurricane Katrina, the company said.
Robert L. Wood, Chemtura's chairman and chief executive officer, said the company believes the earnings results "this quarter and next will prove to be anomalies in an otherwise strong long-term story."
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CEM,
Source: Waterbury Republican-American
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