A. Schulman shares higher on 3Q profit
Shares of A. Schulman, Inc. (Nasdaq: SHLM) are rising on news the Akron, Ohio-based supplier of plastic compounds and resins has increased its profit in the third quarter of 2007.
The net income for the quarter ended May 31 was $10.1 million, or $0.37 per share, compared with $8.9 million, or $0.29 per share, during the same three months of 2006, the company said before the start of trading. That beats Wall Street’s projected earnings of $0.25 per share.
Net sales increased 9.3% to $467.0 million, from $427.3 million during the third quarter of the previous fiscal year. Analyst estimates were not available.
For the nine months, net income was $14.1 million, or $0.52 per share, compared with a profit of $25.1 million, or $0.81 per share, a year earlier. The numbers for this year were inflated by $2.8 million due to a depreciation of the U.S. dollar and the appreciation of foreign currencies, particularly the euro.
“While we remain encouraged by the long-term potential of our markets, our year-to-date results have been affected by the slowness in both North America and Europe,” President and CEO Terry Haines said. “We are also encouraged by the new North American organization we are announcing today, as we believe this new approach to the market will allow us to better address profitable growth opportunities.”
In February 2007, A. Schulman announced the second phase of this North American restructuring plan with actions to increase net income in the second half of fiscal 2007 by $7.0 million with annual savings of $14.0 million to $15.0 million thereafter.
The company plans on eliminating certain positions and reducing retiree health care benefits, and is looking to improve its purchasing processes and logistical efficiencies.
A. Schulman reported that the restructuring plan is progressing as scheduled is expected to result in charges totaling approximately $2.2 million for the full 2007. However, the company said also that it’s on track to achieve its targeted full-year cost savings.
In June A. Schulman purchased European color masterbatch manufacturer the Delta Plast Group in order to improve its handle on the continent’s growing small-batch, flexible color business. However, the deal is not expected to contribute to A. Schulman’s bottom line until fiscal 2008.
At 1:10 p.m. ET shares were up $2.37, or 11%, to $24.84. The 52-week high of $25.24 was established on Oct. 23, 2006. The 52-week low of $19.60 was set Jan. 10.
