Rohm and Haas issues Q2 outlook
PHILADELPHIA: The company however, announced that volumes were expected to be flat. "The overall global economy is relatively stagnant, which is impacting demand across many of our businesses," notes Raj L. Gupta, chairman and chief executive officer. "Early in the quarter we saw indications that things might be improving, however demand in late May and early June has not shown the same momentum, due in part to general weakness in the economy, as well as the prolonged wet weather in the U.S. The bright spot is that our new products continue to be in strong demand by our customers."
Earnings for the second quarter are expected to be a net loss in the range of ($6) million to ($12) million or ($.03) to ($.06) per share, as compared to second quarter 2002 earnings from continuing operations of $92 million or $.41 per share. This loss includes approximately $95 million after tax, in restructuring and asset impairment charges. Approximately $70 million of this are non-cash charges pertaining to asset impairments, primarily related to finite lived intangibles assets associated with the Lamineer® product line of the Powder Coatings business. The remaining charges are associated with restructuring and cost improvement programs, primarily in the European Region.
Higher raw material and energy prices continue to negatively impact costs, although prices appear to have peaked for most of the company's major raw materials, the company said. Selling price increases implemented earlier this year have closed the gap between raw materials and selling prices to approximately $35 million from the baseline comparison period of the fourth quarter 2001.
"We continue to experience uneven demand in most of our major markets and regions," said Gupta. "Despite this tough environment, we remain focused on our customers needs, investing in new product development, efficient plant operations and managing discretionary costs. As the economy gains some traction, we are well positioned for stronger performance," he said.
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