Current economy continues to impact demand, Cytec
June 23, 2009 - United States Of America
Cytec Industries Inc announced that due to continued deterioration in market demand, it is reducing its outlook for full year 2009 diluted earnings per share after adjusting for special items to a range of $0.60 to $0.90 per share, down from the prior guidance of $1.35 to $1.75 per share.
Shane Fleming, Chairman and Chief Executive Officer explained, “We are continuing to see lower demand in Engineered Materials, resulting from inventory destocking by parts manufacturers for large commercial aircraft as well as a sharper than expected slowdown in production rates related to business and regional jets. In response to these deteriorating market conditions, we are taking aggressive actions to realign our cost base.
While we are responding to the new market demand in the base business, we continue to selectively invest in future growth programs and to be prepared when new large commercial aircraft platforms and the Joint Strike Fighter come into large scale production. The secular trend of higher composite usage remains intact, and we are working with a number of customers on near and long term opportunities.
In Building Block Chemicals, we are experiencing weak demand in end markets for melamine products due to the general economic environment, and are expecting margin pressure in acrylonitrile due to cost increases in propylene.
We are on track with our cost reduction efforts which are expected to increasingly benefit our Coating Resins product lines in the second half of this year. Although weak demand continues to challenge the Coating Resins products in the current quarter, we are seeing sequential sales volume improvement. The remaining segments performance within Specialty Chemicals continues essentially as expected.”
David Drillock, Vice President and Chief Financial Officer, said “The continuing weak demand in Coating Resins plus the recent demand slowdown mentioned earlier in Engineered Materials lead us to expect a modest loss for the second quarter before special items, and to decrease our full year earnings per share outlook.
We are making significant progress in the areas within our control, such as the structural cost improvement programs and working capital. I am particularly pleased with our success in the working capital initiative, which has generated improved cash flow ahead of schedule and has accelerated our debt pay down.”