Chemtura Corporation (CHMT) recently announced an increase in price for several of its products for compensating continuous growth in raw material costs. The price hikes will be effective as of Jan 15, 2014 or as contracts allow.
The company has raised the prices of certain specialty polyolester (POE) products which are supplied by the Industrial Performance Products segment. Prices of POE products have risen by up to $0.30/kg globally. The company is also raising the price of products supplied by its polyalphaolefins (PAO) business at a rate of up to $0.15/lb.
Further, Chemtura declared an increase in cost of products supplied by its Urethanes Business. Pre-polymers and specialty curative products are set to rise by about 5% in the North America and Latin America regions.
Chemtura posted its third-quarter 2013 results on Nov 4. Net income from continuing operations was reported at $10 million or 10 cents a share compared with a profit of $21 million or 21 cents a year ago. Results missed the Zacks Consensus Estimate of 22 cents per share.
Revenues went down roughly 4.2% year over year to $569 million in the quarter and missed the Zacks Consensus Estimate of $612 million. In Oct 2013, Chemtura also entered into a stock purchase agreement to sell its Consumer Products business, including dedicated manufacturing plants in the U.S. and South Africa, to KIK Custom Products Inc. The deal amounted to $315 million, subject to certain pre- and post-closing adjustments and is expected to expand the company’s margins to help meet financial and strategic performance goals.
Chemtura currently carries a Zacks Rank #3 (Hold). However, some better-ranked stocks in the specialty chemicals industry are Ferro Corp. (FOE), Ecolab Inc. (ECL) and HB Fuller Co. (FUL). All these stocks hold a Zacks Rank #2 (Buy).
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