* Q1 adj EPS $0.47 vs est. of $0.21
* Q1 revenue jumps 26 pct, beats estimates
* Sees strong profit margins through 2010
* Shares up as much as 18 percent
(Adds comments from conference call, analyst; share movement)
By Antonita Madonna Devotta
BANGALORE, April 29 Rockwood Holdings Inc
ROC.N posted first-quarter earnings that breezed past analyst
estimates on higher pricing and rigorous cost controls, and the
chemicals company expects strong profit margins for the rest of
Shares of Princeton, New Jersey-based Rockwood rose about
$5 to $31.28, their highest in nearly two years, after paring
some gains to trade at $30.59 Thursday afternoon on the New
York Stock Exchange.
The company has seen the pick up in its end markets, like
the automotive sector, consumer electronics and medical
industry, result in higher volumes for almost all of the high
value-added specialty chemicals and materials it produces.
On a conference call with analysts, Chief Executive Seifi
Ghasemi said he expected second-quarter growth in lithium
product volumes and surface treatment business sales at the
company's largest segment -- specialty chemicals, which
accounts for about 35 percent of its total revenue.
"We do have enough visibility to say that we feel pretty
good about the second quarter, but want to be cautious for the
summer holidays and after that see what happens to auto
production in Germany...but otherwise, things are looking
strong," he said.
Credit Suisse analyst John McNulty upgraded the company to
"outperform" from "neutral," citing the company's strong
first-quarter results and on expectations of
better-than-expected earnings going forward, despite weaker
lithium pricing and negative foreign exchange headwinds.
"While Rockwood's first-quarter earnings were impressive,
given their cost cuts in businesses that already had sizeable
normalized margins, we believe the company should be able to
drive significantly more earnings and cash as volumes return,"
he wrote in a note to clients.
The analyst also raised his price target on the stock to
$38 from $30.
In the latest quarter, the specialty chemicals company
swung to a profit of $36.9 million, or 48 cents a share, from a
loss of $1.5 million, or 2 cents a share, a year ago.
Excluding items, the company said it earned 47 cents a
Revenue for the quarter rose 26 percent to $833.9 million,
on a strong rebound in volumes across almost all business
Analysts, on average, were looking for earnings of 21 cents
a share, before items, on revenue of $775.2 million, according
to Thomson Reuters I/B/E/S.
"Our adjusted earnings before interest, taxes, depreciation
and amortization margins were 19.8 percent, one of the highest
we have achieved since becoming a public company," Ghasemi
The company's primary specialty chemical segment saw sales
rise about 29 percent and adjusted EBITDA surge 47 percent.
"Although we are experiencing levels of business activity
which are healthier than last year, it is difficult to assess
the impact that replenishment of our customer inventories is
having on sales," Ghasemi said in a statement.
(Reporting by Antonita Madonna Devotta in Bangalore; Editing
by Maju Samuel, Aradhana Aravindan)