Albemarle reports drop in earnings

Specialty chemicals maker Albemarle Corp. on Wednesday reported second-quarter earnings dropped to $22.4 million, or 28 cents per share, from $82.7 million, or 98 cents per share a year ago.

The Baton Rouge company noted second-quarter earnings were affected by an April 15 deal to sell its antioxidant, ibuprofen and propofol businesses and assets to SI Group Inc.

Albemarle took a pre-tax charge to reflect an expected loss on the sale of the assets, which should be completed this year.

The deal includes Albemarle’s manufacturing sites in Orangeburg, South Carolina, and Jinshan, China, and Albemarle’s antioxidant product lines. Certain applications and technical support capabilities in Baton Rouge and Shanghai are included.

Taking into account the transaction, Albemarle’s second-quarter adjusted earnings were $86.8 million, or $1.10 per share, compared with $79.2 million, or 94 cents per share, for the second quarter of 2013, Albemarle said.

Net sales in the second quarter totaled $604.7 million, up from net sales of $576.8 million in the second quarter of 2013.

“Overall results were up year over year and sequentially in terms of sales and earnings,” said Luke Kissam, Albemarle’s president and CEO.

The gain in sales was driven mainly by strong market demand and higher production volumes in catalysts that was offset by lower volumes in its performance chemicals, he said.

Catalysts generated net sales of $270.5 million in the second quarter, a 16 percent increase from a year ago. Income from the segment was up 56 percent to $67.9 million in the second quarter from a year ago.

Performance chemicals had net sales of $334.2 million in the second quarter, a 3 percent decrease from a year ago. Income from the segment was down 12 percent to $73 million.

In April, Kissam said the transaction with SI Group is part of a previously announced realignment of Albemarle to focus on growing its core specialty chemicals businesses.

Since then, Albemarle announced a $6.2 billion cash and stock agreement in July to acquire Rockwood Holdings Inc.

Kissam noted in Wednesday’s earnings report that Albemarle was able to produce results at the same time its was finalizing the Rockwood deal in July, which he described as “transformative.”

The New Jersey company produces the lithium and lithium compounds used in batteries for smartphones and hybrid and electric vehicles.

When the transaction is completed, Albemarle shareholders will own about 70 percent of the combined company and Rockwood shareholders will own about 30 percent.

The boards of directors of Albemarle and Rockwood have approved the transaction. It is subject to shareholder and regulatory approvals and is expected to close by the first quarter of 2015.

Albemarle’s earnings for the six months ended June 30 were $79 million, or 99 cents per share, compared with $166.7 million, or $1.92 per share, for 2013. Adjusted earnings were $165.2 million, or $2.08 per share, compared with $160 million, or $1.84 per share, for 2013. Net sales for the six-month period were $1.20 billion, up from $1.16 billion for the same period in 2013, driven mainly by higher catalysts demand and volumes, and the favorable impacts of a stronger European Union euro, partly offset by lower pricing and volumes in performance chemicals.

Albemarle reported earnings after the stock market closed Wednesday. Its stock was down 54 cents, or 0.8 percent, to $66.71.