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Operating income rises 15% at Ashland in Q3FY'14
05
Aug '14
For the third quarter ending June 30 of fiscal year 2013-14, volumes at Ashland a leader in specialty chemical solutions rose 3 percent, sales were down 1 percent and operating income grew 15 percent to $212 million.
 
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 9 percent to $298 million and EBITDA as a percent of sales increased 180 basis points to 18.6 percent. Earnings from continuing operations were $71 million, or $0.90 per diluted share, on sales of $1.6 billion. 
 
These results included six key items that together reduced income from continuing operations by approximately $58 million, net of tax, or $0.73 per diluted share. Among the key items were a $23 million after-tax charge related to Ashland's global restructuring and a $12 million after-tax charge related to a pension adjustment. 
 
Excluding the six key items, Ashland's adjusted income from continuing operations was $129 million, or $1.63 per diluted share.
 
For the year-ago quarter, Ashland reported income from continuing operations of $89 million, or $1.12 per diluted share, on sales of $1.6 billion. The year-ago results included five key items that together reduced income from continuing operations by approximately $15 million, net of tax, or $0.19 per diluted share. 
 
Excluding these key items, Ashland's adjusted income from continuing operations was $104 million, or $1.31 per diluted share. 
 
The financial results of Ashland Water Technologies have been excluded from continuing operations, due to the commercial unit's sale to a fund managed by Clayton, Dubilier & Rice.
 
However, certain costs previously allocated to Water Technologies remain in continuing operations for all periods and are classified within Ashland's selling, general and administrative expenses.
 
"Ashland's strong third-quarter results reflect improved product mix and operating performance in key areas of our business. At the same time, we are beginning to see the benefits of our global restructuring and related cost savings," said James J. O'Brien, Ashland CEO. 
 
He added, "Each of our three commercial units met or exceeded our previous revenue and profitability estimates outlined at the beginning of the quarter. This performance helped drive Ashland's EBITDA margin to 18.6 percent, a good step toward our goal of being a top-quartile specialty chemical company”.
 
Among business segments, Ashland Specialty Ingredients turned in a solid quarter, with volume growing 5 percent and EBITDA margin approaching 22 percent, benefitting from improved operating performance and global restructuring.
 


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