* Q1 adj EPS 47 cents vs Wall Street forecast 24 cents
* Revenue up 28 percent to $2.68 billion; beats Street
* Margins rise in three of five business units
* Shares up 6.2 percent to near three-year high
(Updates stock move; adds analyst)
By Ernest Scheyder
NEW YORK, May 5 Chemical producer Huntsman Corp
(HUN.N) posted a better-than-expected quarterly profit as it
raised prices to offset increased raw material costs, sending
its shares up 6.2 percent to a nearly three-year high.
The company, which makes the building blocks for auto
paint, foam insulation and Spandex, said demand was strong,
despite higher prices in four of its five business units.
Margins improved in only three units, though. The pigments
unit saw margins jump the most -- 13 percentage points -- due
to tight supplies of titanium dioxide, a key ingredient in auto
"They did extremely well," Gleacher & Co analyst Edlain
Rodriguez said. "Their facilities are running at full capacity.
They're able to raise prices to offset costs and demand is
In a February interview with Reuters, Chief Executive Peter
Huntsman warned that supply costs would jump in the first
"Demand for our largest businesses continues to improve
with the global economic recovery," Huntsman said in a
statement on Thursday.
(For a graphic on Huntsman, click on:
"We are raising prices and recapturing margin despite the
headwind of increased raw material and energy costs."
For the first quarter, the company posted net income of $62
million, or 26 cents per share, compared with a net loss of
$172 million, or 73 cents per share, in the year-ago period.
Excluding a charge to settle a legal dispute, a gain from
currency transactions and other one-time items, Huntsman earned
47 cents per share. By that measure, analysts expected 24 cents
per share, according to Thomson Reuters I/B/E/S.
Revenue rose 28 percent to $2.68 billion. Analysts expected
The company's cost of goods sold, a key measure of raw
material prices, jumped 28 percent to $2.22 billion.
Sales dropped in the company's textile effects unit, which
makes clothing dyes. Customers were not as willing to pay
higher prices that stemmed in part from spiking cotton costs.
Huntsman is one of the world's largest producers of
titanium dioxide, which is primarily used to make automobile
paint. Last month, rival DuPont (DD.N) said a Chinese company
stole its titanium dioxide trade secrets. [ID:nN06269288]
Huntsman shares were up 6.2 percent at $20.69 in afternoon
trading after hitting a nearly three-year high of $20.95
earlier in the session.
Jon Huntsman, the former U.S. ambassador to China and
brother of Huntsman Corp's chief executive, is considering a
run for the White House. [ID:nN17134647]
(Reporting by Ernest Scheyder; editing by Maureen Bavdek,
John Wallace and Andre Grenon)