Chemtura Corporation (CHMT) has provided a highlight on how its segments are performing in the second quarter of 2013 along with its current guidance for the quarter.
Industrial Performance Products: Chemtura stated that the segment is performing in line with what it had delivered in the first quarter of 2013 and is facing similar market conditions. The current quarter results for the segment are expected to be similar to those in the previous quarter.
Industrial Engineered Products: According to Chemtura, demand for flame retardants used in insulation foams stabilized in the current quarter after falling sharply in the first quarter. Also demand from electronics applications is showing modest sequential improvement.
For the second quarter, Chemtura expects margins to remain under pressure due to challenging business conditions and increased raw material costs. The company expects the net impact to reduce operating income for the segment this quarter by $5 million to $10 million from the $20 million it had earned in the previous quarter.
Consumer Products: Though the segment started the quarter at a slow rate, Chemtura stated that sales have started increasing and is expected to deliver almost at par with the $20 million of operating income it had earned in year-ago quarter.
Chemtura AgroSolutions: The late start to this year’s growing season impacted sales in the initial month of the quarter. However, sales have picked up and the segment is on track to deliver a comparable performance to that of the second quarter of 2012.
Chemtura expects the cash expense component of general corporate expense to decrease in the second quarter compared with the sequentially prior quarter as the company will implement its actions to eliminate stranded costs, resulting from the divestiture of its Antioxidants business that closed in April 2013, among other matters.
Chemtura expects to fall short of its performance in the second quarter of 2012 on a continuing operations basis due to the challenges faced by the Industrial Engineered Products segment. However, the company remains optimistic about the strong performance from its other three segments.
Chemtura currently carries a Zacks Rank #5 (Strong Sell).
Other companies in the specialty chemicals industry with favorable Zacks Rank are OM Group Inc. (OMG), American Vanguard Corp. (AVD) and Ferro Corp. (FOE). While American Vanguard holds a Zacks Rank #1 (Strong Buy), Ferro Corp. and OM Group retain a Zacks Rank #2 (Buy).
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