Olin came out tonight and said what anybody with a calculator and a brain should have been able to figure out weeks ago: Olin will "exceed" their previous EPS guidance of 65-70c/share in the third quarter. (Note that Briefing.com screwed this up: they read the Olin press release and announced that Olin was going to come in at the upper end of the 65-70c/share range.)
Olin also announced they are writing off their entire investment in some structured debt product. They'll probably get some settlement when they SIV closes up and pays out any residual (is the U.S. debt market screwed up, or what???), but in the meantime it looks as though the earnings are going to be so good in 3Q that they will take the hit now (and the income tax savings) and book any settlement as earnings sometime later.
$26mm loss. No, no, no, it's not the fault of the credit markets, it's Fischer and Rupp's fault. What the hell did they invest in? I want to know!!!! They need to be held accountable. This needs to be reflected in their comp. Fischer received a huge number of options whichh he excercised. I'm pissed and I plan to raise a stink. My wife and I have 10,000 plus shares and I want to know what happened. This company has a history of some shady stuff. Note tha all these guys cashed out after last qtr run up. Sure seems strange to me. Time to contact the SEC.
If you fire every CEO who made a bad fixed income investment in the last few years, you'd have to fire every CEO in America. Maybe they should have sold the SIV sometime after it resulted in the smaller charge back in July, but for all we know it was unsaleable. These guys are running a chemical company, not a bank, and they have been doing a good job there.
I bought some OLN today at these good prices, even after knowing about the $26 million writedown. The $.20 dividend is a good rate and appears to be very stable. I too would like to know what type of structured investments these were.
I was also wondering if companies with high debt and low cash/marketable securities balances might better weather the current economic storm than companies with little debt and high cash/securities. This is assuming that the debt is long term and investments were made in buildings and equipment and the cash rich company had their money in places other than Money Markets and treasuries. I wonder how a cash rich company like Microsoft fared with its investments.