Solutia’s 1st Q 2012 results down, but automotive film sales up
Solutia Inc., St. Louis, on April 30 reported its net sales for the first-quarter 2012 of $498 million, down $11 million or 2% from the same period in 2011.
Reported income from continuing operations attributable to Solutia was $53 million in the first quarter 2012, down $12 million from the same period in 2011.
Both periods were impacted by certain events affecting comparability, which resulted in a net after-tax charge of $15 million in 2012 and a net after-tax gain of $5 million in 2011. Excluding these items, adjusted earnings increased $8 million. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the first quarter of 2012 totaled $126 million, down $9 million from the same period in 2011. Higher average selling prices and lower manufacturing costs were more than offset by lower sales volumes, higher raw materials costs and increased research and development expenditures.
Adjusted earnings per share totaled 55 cents, up 5 cents, or 10% from the same period in 2011 as lower interest expense and lower income taxes more than offset the decline in adjusted EBITDA. Interest expense was lower as a result of the debt reduction achieved in 2011, and income taxes were lower primarily due to the reversal of a deferred tax liability related to the extension of the Company’s tax holiday in Malaysia.
In order to aid understanding of Solutia’s business performance, the results of its business segments, such as its films, figure in.
For example, where other segments may have experienced lower sales volume, Performance Films’ first quarter 2012 net sales totaled $85 million, an increase of $9 million or 12% from the same period in 2011. The increase in net sales was due to the acquisition of Southwall and to strong window film sales in North America and Asia. Partially offsetting these gains were lower technical film sales into a softer e-reader market in 2012. Adjusted EBITDA decreased $3 million for the first quarter of 2012 compared to the prior-year period. This earnings decrease was primarily due to increased raw material costs and higher manufacturing costs, partially offset by higher sales volumes within the automotive market.