Rockwood Holdings Q4 Profit Surges On Higher Sales, Gain

(RTTNews) - Rockwood Holdings, Inc. (ROC), a producer of specialty inorganic chemicals, on Monday reported a surge in profit for the fourth quarter from last year, reflecting higher sales and a gain on sale of discontinued operations.

The Princeton, New Jersey-based company's net income attributable to shareholders for the fourth quarter was $499.8 million or $6.69 per share, up from $21.0 million or $0.26 per share in the prior-year period.

In the latest quarter, Rockwood completed the sale of the Clay-based Additives business for a gross purchase price of $635 million, resulting in a gain of $506.3 million net of tax, or $6.49 per share. In addition, the latest quarter's results include net charges of $24.7 million, compared to net charges of $7.3 million in the prior-year period.

Excluding the net charges, adjusted net income from continuing operations was $39.5 million or $0.53 per share, compared to $35.6 million or $0.44 per share in the year-ago quarter. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales from continuing operations for the quarter grew 8 percent to $347.0 million from $322.0 million in the same period last year. Including discontinued operations, net sales declined 14 percent to $715.6 million from $829.0 million in the prior-year period. Analysts had a consensus revenue estimate of $342.14 million.

Lithium segment net sales for the quarter declined 4 percent from last year to $114.9 million primarily from lower potash sales that were partly offset by higher volumes of lithium chloride and lithium hydroxide.

Surface treatment segment sales rose 15 percent from the year-ago period to $200.9 million, reflecting increased volumes in most markets, particularly driven by higher automotive OEM, general industry and aerospace applications. In addition, the company completed the acquisition of the remaining 50 percent interest in a previously unconsolidated joint venture in India as well as higher selling prices.

For fiscal 2013, Rockwood Holdings' net income attributable to shareholders was $1.66 billion or $21.45 per share, up from $379.2 million or $4.74 per share in the prior year. Adjusted net income from continuing operations was $122.8 million or $1.59 per share, compared to $139.3 million or $1.74 per share in the previous year.

Net sales from continuing operations for the year rose 5 percent to $1.38 billion from $1.32 billion last year. Including discontinued operations, net sales edged up to $3.52 billion from $3.51 billion in the prior year.

Street expected the company to earn $2.06 per share for the year on revenues of $2.47 billion.

Looking ahead to fiscal 2014, Rockwood Holdings forecasts surface treatment to grow at solid high single digit growth with target adjusted EBITDA margins of 22 percent to 23 percent, while lithium applications is projected to continue to record adjusted EBITDA margins of 36 percent to 38 percent.

ROC closed Friday's trading at $78.88, down $2.24 or 2.76 percent on a volume of 3.84 million shares.