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Q3FY14 net income plunges drastically at Omnova Solutions
27
Sep '14
For the third fiscal quarter ending August 31, 2014, net income plunged drastically from the corresponding quarter of 2013, at speciality chemicals producer and NYSE listed Omnova Solutions.

Omnova reported net income of $1.8 million, or $0.04 per diluted share, for the third quarter of 2014, against $9.0 million, or $0.19 per diluted share, for the third quarter of 2013.

Its adjusted income from continuing operations totalled $2.2 million, or $0.05 per diluted share versus $8.7 million, or $0.19 per diluted share, for the third quarter of 2013.

In the third quarter of 2014, revenues slowed down to $252.1 million from $261.2 million in the prior year quarter.

Business segment wise, sales rose 2.3% in Performance Chemicals specialty chemical product lines, led by oil & gas and specialty coatings, and went up 3.1% in Engineered Surfaces' laminates product line.

Omnova said, sales declined 15.4% in Performance Chemicals' performance material product lines from unusual weakness in coated publication paper market.

During the quarter, coated paper sales declined by 19%, as no contracts were up for bid during the quarter.

It said it had added a new, higher strength product and are expecting some improvement during the fourth quarter.

Carpet volume was about flat year-over-year, and Omnova believes the carpet market is now poised for modest growth.

Volume in the specialty nonwovens product line was also down during the quarter as customers reduced inventory levels in light of the start-up of local Asian supply by OMNOVA.

Omnova added that early nonwovens orders for September are returning to expected levels.

However, Omnova expects sequential profit improvement from the third quarter to the fourth quarter of fiscal 2014.

“This will come from increased Chinese sales, stronger paper and carpet margins and continued growth in oil & gas, specialty coatings and laminates”, the chemicals producer added.

CEO Kevin McMullen said, “We see strong volume growth in key Specialty Chemicals product lines, notably oil & gas and specialty coatings, with recovery in the nonwovens product line, particularly in Asia.

McMullen continued, “Engineered Surfaces' laminates product line remains strong and we are entering the fourth quarter with healthy order backlogs in both oil & gas and laminates". (AR)

Fibre2fashion News Desk - India

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