WR Grace 2Q net income falls, but beats estimates
WR Grace posts 8.6 pct drop in 2nd-qtr net income on costs, but beats Wall Street predictions
COLUMBIA, Md. (AP) -- W.R. Grace & Co. said Wednesday its second-quarter net income fell 8.6 percent, pulled down by costs related to an asbestos settlement and its ongoing restructuring under bankruptcy protection.
But Grace's adjusted profit beat Wall Street predictions and its shares jumped 11 percent in morning trading.
The Columbia, Md.-based chemical maker earned $69.3 million, or 90 cents per share, down from $75.8 million, or $1 per share, in the same quarter last year.
Excluding one-time charges related to its bankruptcy protection proceedings and restructuring, including a $19.5 million payment to residents of a small Montana town sickened by asbestos from one of its plants, the company said it posted an adjusted profit of $1.14 per share for the recent quarter.
Analysts, on average, expected a profit of $1.08 per share, according to a FactSet poll.
Net sales were essentially flat at $826.7 million compared with $826.4 million a year ago. The company said pricing improvements and higher sales volumes were offset by unfavorable currency exchange rates and lower rare-earth surcharges.
Grace said it expects its 2012 sales to total between $3.1 billion and $3.2 billion, also boosted by better volumes and pricing, but hurt by lower rare-earth surcharges and unfavorable exchange rates. Analysts polled by FactSet expect $3.27 billion in revenue.
Grace filed to reorganize under Chapter 11 bankruptcy protection in 2001. A bankruptcy court reaffirmed its reorganization plan in June, but several parties filed to appeal the decision.
Last month, the court approved agreements between Grace, several insurance companies and the residents of Libby, Mont. who were sickened by asbestos dust from a Grace plant.
In connection with the settlement, the company agreed to pay $19.5 million to help cover medical expenses in order to get the residents to drop their appeals. An estimated 400 people have been killed and 1,750 sickened by asbestos in and around the town.
It's unclear when Grace will emerge from bankruptcy protection, or if it will be allowed to before the other appeals are resolved.
Grace shares rose $6.03, or 12 percent, to $56.53 in morning trading. Over the past 52 weeks, the company's shares have traded between $30.25 and $61.08.
