PolyOne Updates Second-quarter 2008 Outlook
June 19 2008 - 7:02PM
PR Newswire (US)
Company Expects Earnings Improvement CLEVELAND, June 19
/PRNewswire-FirstCall/ -- PolyOne Corporation (NYSE: POL) today
updated its outlook for the second quarter ending June 30, 2008.
The Company expects second-quarter consolidated sales to increase
7% to 9% compared with the second quarter of 2007, despite
challenging demand trends in the North American housing and
automotive markets. This projection is slightly higher than the
Company's original estimate of 6% to 8% sales growth.
Second-quarter 2008 earnings before special items are expected to
show modest improvement over the same period a year ago earnings
before special items and to increase sequentially from
first-quarter 2008 earnings before special items. Aggregate sales
for PolyOne's Specialty platform, including sales from GLS
Corporation, are projected to grow nearly 25% in the quarter
compared with the second quarter of 2007. GLS was acquired in
January 2008 and represents approximately 60% of the Specialty
growth for the second quarter, similar to the first quarter of
2008. PolyOne's Specialty platform consists of International Color
and Engineered Materials, Specialty Engineered Materials, North
American Color and Additives and Specialty Inks and Polymer
Systems. Operating income in the aggregate for these businesses is
projected to grow significantly from the same period a year ago,
reflecting both margin expansion and an increased sales base.
International Color and Engineered Materials sales in the second
quarter are expected to demonstrate double-digit growth compared
with the same period a year ago, primarily due to favorable foreign
currency translation. While International demand is generally
intact, sales in the latter part of the quarter could be adversely
affected by delivery disruptions due to freight carrier strikes in
Europe. In Asia, pockets of demand softening continue to be evident
for customers who primarily export to North America. International
segment operating income, driven by stronger operating margins, is
expected to increase significantly compared with the second quarter
of 2007. For PolyOne Distribution, the Company anticipates
meaningful increases in both sales and operating income during the
second quarter of 2008 compared with the second quarter of 2007,
with earnings impacted favorably by targeted growth efforts in key
end markets. Second-quarter 2008 sales for the Performance Products
and Solutions platform are expected to decline 6% to 8% compared
with the second quarter of 2007. The Performance Products and
Solutions platform consists of Geon Performance Polymers, Producer
Services and Resin and Intermediates. Operating income for
Performance Products and Solutions is anticipated to be slightly
above first-quarter 2008 performance, although significantly below
the second-quarter 2007 level. This decrease is due primarily to
lower demand in the North American housing, construction and
automotive markets compared with the same period a year ago, and
margin pressure caused by higher raw material and energy costs not
fully offset by increased pricing. SunBelt earnings are projected
to increase sequentially compared with the first quarter of 2008,
but decline compared with the second quarter of 2007. Strong
chlor-alkali margins, driven by increasing caustic prices, are
expected to be more than offset by weak end-market demand for
chlorine derivatives compared with the same period last year.
Additional considerations: -- The Company expects second-quarter
Corporate and eliminations to be between $11 million and $13
million, down from the prior-year quarter primarily due to
adjustments in 2007 to associated operating reserves. -- The
Company anticipates net financing expenses to be approximately $11
million in the second quarter of 2008. Second-quarter 2007 net
financing expenses were $14.7 million, before consideration of a
$1.1 million special item. The lower expense is due to the
redemption in 2007 of $241.4 million of senior notes due 2010,
partially offset by debt incurred in connection with the
acquisition of GLS. -- The Company anticipates an effective tax
rate between 33% and 35%. Second-quarter 2008 Earnings Release and
Conference Call PolyOne intends to release its second-quarter
earnings on Wednesday, August 6, 2008, and host a conference call
at 9:00 a.m. Eastern time on Thursday, August 7, 2008. The
conference dial-in number is 866-543-6403 (domestic) or
617-213-8896 (international), passcode 35865076, conference topic:
Second-quarter 2008 PolyOne Earnings Conference Call. The replay
number is 888-286-8010 (domestic) or 617-801-6888 (international).
The passcode for the replay is 12202246. The call will be broadcast
live and then be available via replay until Thursday, August 14,
2008, on the Company's web site at http://www.polyone.com/ . About
PolyOne PolyOne Corporation, with annual revenues of more than $2.7
billion, is a leading global provider of specialized polymer
materials, services and solutions. Headquartered outside of
Cleveland, Ohio USA, PolyOne has operations around the world. For
additional information on PolyOne, visit our new website at
http://www.polyone.com/ . Forward-looking Statements In this press
release, statements that are not reported financial results or
other historical information are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward- looking statements give current expectations or
forecasts of future events and are not guarantees of future
performance. They are based on management's expectations that
involve a number of business risks and uncertainties, any of which
could cause actual results to differ materially from those
expressed in or implied by the forward-looking statements. You can
identify these statements by the fact that they do not relate
strictly to historic or current facts. They use words such as
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," and other words and terms of similar meaning in
connection with any discussion of future operating or financial
performance and/or sales. In particular, these include statements
relating to future actions; prospective changes in raw material
costs, product pricing or product demand; future performance;
results of current and anticipated market conditions and market
strategies; sales efforts; expenses; the outcome of contingencies
such as legal proceedings; and financial results, including those
of GLS. Factors that could cause actual results to differ
materially include, but are not limited to: -- the effect on
foreign operations of currency fluctuations, tariffs,
nationalization, exchange controls, limitations on foreign
investment in local businesses and other political, economic and
regulatory risks; -- changes in polymer consumption growth rates
within the U.S., Europe or Asia or other countries where PolyOne
conducts business; -- changes in global industry capacity or in the
rate at which anticipated changes in industry capacity come online
in the polyvinyl chloride (PVC), chlor-alkali, vinyl chloride
monomer (VCM) or other industries in which PolyOne participates; --
fluctuations in raw material prices, quality and supply and in
energy prices and supply, in particular fluctuations outside the
normal range of industry cycles; -- production outages or material
costs associated with scheduled or unscheduled maintenance
programs; -- the cost of compliance with environmental laws and
regulations, including any increased cost of complying with new or
revised laws and regulations; -- unanticipated developments that
could occur with respect to contingencies such as litigation and
environmental matters, including any developments that would
require any increase in our costs and/or reserves for such
contingencies; -- an inability to achieve or delays in achieving or
achievement of less than the anticipated financial benefit from
initiatives related to cost reductions and employee productivity
goals; -- an inability to raise or sustain prices for products or
services; -- an inability to maintain appropriate relations with
unions and employees in certain locations in order to avoid
business disruptions; -- any change in any agreements with product
suppliers to PolyOne Distribution that prohibits PolyOne from
continuing to distribute a supplier's products to customers; -- the
ability to successfully integrate GLS; -- the ability to
successfully integrate Ngai Hing PlastChem, and -- other factors
affecting our business beyond our control, including, without
limitation, changes in the general economy, changes in interest
rates and changes in the rate of inflation. We cannot guarantee
that any forward-looking statement will be realized, although we
believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties
and inaccurate assumptions. Should known or unknown risks or
uncertainties materialize, or should underlying assumptions prove
inaccurate, actual results could vary materially from those
anticipated, estimated or projected. Investors should bear this in
mind as they consider forward-looking statements. We undertake no
obligation to publicly update forward-looking statements, whether
as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on
related subjects in our reports on Form 10-Q, 8-K and 10-K that we
provide to the Securities and Exchange Commission. You should
understand that it is not possible to predict or identify all risk
factors. Consequently, you should not consider any list to be a
complete set of all potential risks or uncertainties. (Ref. #32108)
DATASOURCE: PolyOne Corporation CONTACT: Investors, Robert M.
Patterson, Senior Vice President & Chief Financial Officer,
PolyOne Corporation, +1-440-930-3302 Web site:
http://www.polyone.com/
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