Following are some highlights of companies reporting earnings:
German chemical company BASF SE said net income fell 69% in the third quarter as the global downturn hurt demand and prices for the company's products. BASF, based in Ludwigshafen, said net income fell to 237 million euros, or $348 million, from 758 million euros in the July-September period of 2008—a decrease of nearly 70%. Revenue fell 19% to 12.8 billion euros from 15.7 billion euros in the third quarter of 2008.
"Following the global economic downturn at the end of 2008, our business has stabilized at a low level during the course of the year," BASF said in its report. BASF, the world's biggest chemical company by sales, said fourth quarter revenue should be around third quarter levels, while operating income before special items would probably be higher than a year ago, but lower than in the third quarter 2009.
In terms of divisions, BASF said the chemicals division saw third quarter revenue fall 34% to 2 billion euros as a result of lower volumes and prices. BASF said demand from the textiles, coatings and plastics industries, for example, were weaker compared to a year ago. Operating income for the chemicals division fell 9% to 364 million euros. Meanwhile, the plastics division saw revenue fall 20% to 1.96 billion euros from 2.45 billion euros. Operating income for the plastics division, however, rose 11% to 216 million euros thanks to cost cutting.
BASF’s agricultural products business saw revenue fall just 2% to 623 million euros, with operating income off 32% due to higher marketing, research and development and sales expenses. BASF, which also drills for and refines oil and natural gas, said the energy business' revenue fell 25% to 2.3 billion euros, while operating income fell 37% to 550 million euros. BASF said the results were affected by the significant fall in the price of crude oil.
Cytec Industries, Inc., reported net earnings of $12.5 million for the third quarter of 2009, compared to net earnings of $46.3 million for the third quarter 2008. The decrease includes several special items that total $15.1 million of net expense after-tax. Included in the 2008 quarter were several special items that totaled $4.9 million of net expense after-tax.
In the Coating Resins segment, overall selling volumes were down by 16% versus the third quarter 2008, with lower demand in industrial markets compared to the prior year-ago period. However, volumes improved 12% versus the second quarter 2009, reflecting partial recovery as a result of customer restocking. Selling prices versus third quarter 2008 decreased by 5% in response to competitive pressures and lower raw material costs, while the effect of exchange rates decreased sales by 2%.
Operating earnings of $18.5 million were down versus earnings of $22.7 million in the third quarter 2008, principally due to the weaker selling volumes across each product line in the segment and reduced production rates. This was partially offset by lower raw material costs and the benefits from the cost improvement initiatives.
In Cytec’s Additive Technologies segment, overall selling volumes were down 18% versus the third quarter 2008, primarily due to the exit of several commodity products and partially due to the economic slowdown. Selling prices decreased by 1% and the impact of exchange rates decreased sales by 1%. Operating earnings of $3.1 million were down versus $6.1 million of earnings in the third quarter 2008 mainly as a result of the lower selling volumes and production rates.
In Engineered Materials, selling volumes decreased by 24% versus the third quarter 2008, driven by build rate reductions in business and regional jets, inventory destocking by parts manufacturers within the commercial transport sector, and sales volume reductions in the high performance automotive market. Selling prices increased by 1% and exchange rates reduced sales by 1%. Operating earnings of $18.3 million were down versus earnings of $40.6 million in the third quarter 2008, principally as a result of lower selling volumes and reduced production rates.
Dow Chemical reported sales increase of 6% for the third quarter, mainly due to prices. Excluding Dow AgroSciences, which is a seasonal business, volume increased more than 3% versus the prior quarter. Dow earned $0.24 per share, driven by sequential price increases, with volume growth in Electronic and Specialty Materials and Coatings and Infrastructure—or Advanced Materials—Performance Products and Performance Systems.
Structural cost reductions are ahead of Dow Chemical’s goals, with cost savings of more than $380 million in the quarter and more than $1 billion year-to-date, according to Andrew N. Liveris, chairman and CEO. Dow has already achieved more than 110% of the 12-month cost synergy run-rate goal for the integration of Rohm and Haas, which began just six months ago.
“Dow once again delivered stronger sequential earnings due to our focus on aggressive price/volume management, accelerating cost reductions, especially with the Rohm and Haas integration, plus benefiting from our global presence with volume gains in emerging geographies,” Liveris said. “In addition, we are seeing pockets of volume growth in certain businesses versus the prior quarter, primarily in Advanced Materials, Performance Products and Performance Systems, which have benefited from the beginnings of a global economic recovery.”
Coatings and chemicals maker PPG Industries, Inc., posted a 36% jump in third-quarter profit. PPG posted net income of $159 million, or 96 cents per share, compared with $117 million, or 70 cents per share, in the year-ago period. According to PPG, which supplies many industrial manufacturers— including the automotive industry—the strong result is a positive indicator that the economy may have slowly begun to recover.