UPDATE 1-Omnova Q1 profit beats estimates, shares rise

Wed Mar 24, 2010 5:52pm EDT

* Q1 EPS $0.17 vs est $0.10

* Net sales up 15 pct to $183.9 mln

* Shares jump 8 pct after market

March 24 (Reuters) - Omnova Solutions Inc (OMN.N) posted a first-quarter profit that raced past market estimates as the chemical maker benefited from improved volumes and higher selling prices, sending its shares up 8 percent.

"After spending several years improving our cost structure in the face of reduced market demand, we expect to have strong operating leverage moving forward as volumes continue to outpace last year's levels," Chief Executive Kevin McMullen said in a statement.

For the quarter, net income was $7.8 million, or 17 cents a share, compared with a net loss of $0.1 million, or breakeven per share, in the year-ago quarter.

Analysts on average had expected the company to earn 10 cents, according to Thomson Reuters I/B/E/S.

Net sales rose about 15 percent to $183.9 million versus market expectations of $179.0 million.

First-quarter volumes rose about 12 percent to $18.7 million.

Shares of the company rose 8 percent to $8.0 after the bell. They closed at $7.40 Wednesday on the New York Stock Exchange. (Reporting by Krishna N. Das in Bangalore; Editing by Gopakumar Warrier)

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