Five key items push Ashland to post loss in Q4FY14
By including five key items, Ashland Inc, posted a loss from continuing operations for the fourth fiscal quarter ended September 30, 2014 of $26 million, or $0.35 per diluted share.
The fourth fiscal quarter of 2014 results include, five items that together reduced income from continuing operations by approximately $131 million, net of tax, or $1.77 per diluted share.
By not including these five items, the producer of specialty chemicals said, it would have reported adjusted income from continuing operations at $105 million, or $1.42 per diluted share.
These key items include after-tax charges of $21 million associated with its restructuring, $202 million from its annual non-cash adjustment to pension and a $100 million benefit from discrete tax adjustments.
For the year-ago fiscal quarter, Ashland reported income from continuing operations of $336 million, or $4.27 per diluted share, on sales of nearly $1.5 billion.
The prior year quarter also included five key items that together increased income from continuing operations by approximately $234 million, net of tax, or $2.98 per diluted share.
Excluding these key items, Ashland's adjusted income from continuing operations was $102 million or $1.29 per diluted share, for the fourth fiscal quarter of 2013.
Ashland said in the reporting quarter, volume rose 3 per cent, while operating income grew 11 per cent to $180 million, both increasing from a year ago period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) went up by 8 per cent to $272 million and EBITDA as a per cent of sales increased 60 basis points to 17.7 per cent.
According to Ashland, its global restructuring program, which is targeting $200 million in cost savings remains firmly on track and will capture savings by the end of the second fiscal quarter of 2015.
“As expected, at the end of the fourth quarter, we achieved more than $100 million in annualized run-rate cost savings”, the chemicals producer added.
Separately, the company continued to execute against its previously announced $1.35 billion share repurchase authorization.
As of November 5, 2014, Ashland had retired approximately 8.9 million shares via accelerated share repurchase and 10b5-1 programs.
Ashland has approximately $270 million remaining under its current authorization and expects to complete the remainder of that authorization before it expires in December 2015.
In addition to repurchasing stock, Ashland continues to evaluate other uses of its cash, including potential investments in high-return projects, bolt-on acquisitions and targeted debt reductions.
CEO James O'Brien said, “Ashland's financial performance in the fourth quarter and the full year, marked another step forward on our path towards becoming a top specialty chemicals company." (AR)
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