Ashland Shares Rise After Profit Widely Beats Expectations
Chemical maker Ashland posted a better-than-expected quarterly profit as it raised prices to counter rising raw material costs, sending its shares up more than 4% in premarket trading.
The company makes a wide range of specialty chemicals, including Valvoline oil as well as materials for the packaging and water purification industries. Its improving results offer a small hint on broader economic recovery.
The company's chief executive, James O'Brien, recently underwent surgery to fix a perforated colon. Ashland said last month that O'Brien would be away for up to three months. O'Brien is working on a limited basis after his surgery, a spokesman said on Tuesday.
For the second quarter ended on March 31, Ashland's net income came to $353 million, or $4.39 per share, including a $231 million gain from the sale of its distribution unit to private equity firm TPG Capital for $979 million cash. Excluding that and other one-time items, Ashland posted earnings of 86 cents per share. By that measure, analysts expected 77 cents, according to Thomson Reuters I/B/E/S. Year-earlier net income was $22 million, or 27 cents per share.
Revenue rose 9% to $1.56 billion. Analysts expected $1.49 billion. The cost of sales rose 14% to $1.14 billion.
Shares of Ashland were up 4.3% to $59.50 in trading before the market opened. The stock price has ranged from $42.77 to $63.69 in the past 52 weeks.
