W.R. Grace tops profit estimates; sees lower catalyst sales
(Reuters) - U.S. chemical maker W.R. Grace & Co's (GRA.N) adjusted profit beat analysts' expectations, helped by growth in construction products as well as in engineered materials for the industrial and the coatings markets.
The company, however, warned its sales and earnings outlook for the second half of the year would be hurt as it was unable to raise prices of catalysts, which help refiners process crude oil into gasoline, heating oil and other products.
Sales at the Catalysts Technologies unit, which sells specialty catalysts and additives to refineries, fell more than 11 percent to $290.9 million in the second quarter due to lower pricing and volumes. The business accounted for about a third of the total revenue in the quarter.
Grace tailor-makes catalysts for Tesoro Corp (TSO.N), Citgo Petroleum Corp PDVSAC.UL and other refinery customers to match the chemical makeup of the shale oil that will be refined, a step for which the company charges a premium.
The company expects total sales of about $3.1 billion in the year. Analysts on average were expecting revenue of $3.2 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to W.R. Grace & Co shareholders rose 19 percent to $82.8 million, or $1.07 per share, in the second quarter.
On an adjusted basis, the company earned $1.12 per share, down from $1.14 per share a year earlier.
Analysts on average were expecting a profit of $1.08 per share, according to Thomson Reuters I/B/E/S.
Net sales fell 3 percent to $802.8 million.
The Columbia, Maryland-based company filed for Chapter 11 bankruptcy in April 2001 after an asbestos leak at one of its mines led to thousands of lawsuits against the company.
Although in bankruptcy, Grace was able to survive two recessions and take advantage of a U.S. shale energy revolution that is fueling demand for its fine-powder catalysts.
(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sreejiraj Eluvangal)