Rohm and Haas announce second quarter results

The company reported second quarter 2007 earnings from continuing operations of $161 million, or $0.75 per share, compared with $0.87 per share in 2006. This quarter's results include $0.09 per share in costs associated with operating issues at the Houston, Texas plant and a net asset impairment after-tax charge of $0.03 per share principally related to the write-off of the company's investment in Elemica, an on-line chemicals marketplace. 'The global market conditions we experienced in the first quarter of 2007 continued in the second quarter of this year, as we had anticipated', said Raj L Gupta, chairman, president and chief executive officer of Rohm and Haas Company. 'Our Specialty Materials Group saw growth in all businesses, as strong sales growth outside the US offset continued weakness in the US building and construction markets. The Electronic Materials Group businesses grew modestly, assisted by advanced technology products. The good top-line performance was not fully leveraged in the quarterly earnings partly due to unanticipated operating issues at our Houston plant. In addition, we are experiencing higher raw material costs, which are being partially mitigated through selective price increases. Overall, the second quarter results are in line with our expectations as we continue with the implementation of our Vision 2010 strategy for accelerated shareholder return.' Sales for the first six months of 2007 were $4,350 million, up 5% from the same period in 2006, reflecting higher sales across most businesses, and strong growth in the emerging markets of Asia, Central and Eastern Europe, Türkiye and Latin America. Net earnings from continuing operations of $351 million were down 12% from the first six months of 2006, reflecting the impact of higher raw material costs, higher operating costs, investment to support the implementation of the European Headquarters in Switzerland, and the cost of productivity improvement programs focused on our North American operations. Net earnings per share from continuing operations for the first six months of the year were down 10%, at $1.61 per share compared to $1.79 per share in the prior year period. 'In looking at the full-year 2007, demand is tracking as we had anticipated, with modest growth in the Electronics Market, accelerating towards the second half of the year and robust growth in the emerging markets', said Gupta. 'The weak US building and construction markets remain a challenge for our Specialty Materials businesses, as does the volatile raw material outlook. We are navigating these external challenges through proactive cost management, as well as implementing pricing initiatives to recover higher raw material increases.' As a result of these factors, the company expects full-year sales to increase approximately 6-7%, and earnings per share to be in the $3.35-$3.50 range. Excluding the impact of the Houston operating issues, this represents a modest increase in expected earnings as compared with the company's previous outlook, primarily due to the benefit of the recently announced accelerated share repurchase. 'This level of performance in the face of challenging building and construction markets and high raw material costs demonstrates our ability to respond to the external environment, while moving towards the long-term growth targets of our Vision 2010 strategy', Gupta noted.