Huntsman Corp., the fourth-biggest U.S. chemical maker, reported a third-quarter net loss of $29.8 million as plant maintenance and Gulf Coast hurricanes reduced output. The company said storm damage and lost output will cut fourth-quarter profit $130 million, and its stock tumbled 5.1 percent.
The per-share loss was 14 cents in the third quarter, Salt Lake-based Huntsman said Wednesday in a statement. Net income a year earlier was $43.7 million, or 10 cents a share after preferred-dividend payments. Profit was cut $59 million by the hurricanes and unplanned repairs at the Port Neches, Texas, plant. Revenue still rose 6.4 percent to $3.12 billion.
All base chemicals facilities were shut before Hurricane Rita hit at the Louisiana-Texas border on Sept. 23. The Port Neches plant was shut for the last 38 days of the quarter, slashing output from Huntsman's only North American site for making gasoline additives and propylene oxide, used in plastics and solvents. Some analysts cut fourth-quarter profit estimates.
The hurricanes hurt results more than expected, Deutsche Bank analyst David Begleiter said in a note to clients. He reduced his forecast for fourth-quarter profit to 23 cents a share from 50 cents. Begleiter was ranked second among specialty-chemical analysts in an Institutional Investor survey last month.
Shares of Huntsman dropped $1.03 to close at $19.25 Wednesday on the New York Stock Exchange. The percentage decline was the most since Aug. 4. The shares have dropped 12 percent since debuting on Feb. 10.
Michael Judd, an analyst at Greenwich Consultants LLC in Rumson, N.J., cut his fourth-quarter profit forecast to 40 cents a share from 52 cents. Judd and Begleiter recommend buying Huntsman stock. The company was expected to earn 54 cents, the average estimate of 10 analysts surveyed by Thomson Financial.
The Port Neches plant is running, and "our operational problems appear to be largely behind us," Chief Executive Officer Peter R. Huntsman said on a conference call with analysts. "There is good momentum in all of our commodity lines. Our 2006 outlook is very strong."
Third-quarter results beat some analyst predictions.
Per-share profit excluding some items was 35 cents, Deutsche Bank's Begleiter said. He had forecast profit of 25 cents on that basis, and Greenwich Consultants' Judd had forecast 26 cents.
"Huntsman had pre-announced earnings shortfalls twice during the quarter," Begleiter said. "The upside surprise versus our revised estimate was due to better than expected performance in polymers and base chemicals."
Profit was reduced by $27 million because of the hurricanes and $32 million by the Port Neches maintenance, the company said.
Third-quarter profit rose in the polyurethanes and pigments units from a year earlier and fell at all other divisions.
Base-chemicals profit plunged 87 percent to $8.9 million as rising energy and raw-material costs outpaced higher prices, particularly in Europe, Huntsman said.
The polymers unit had a loss of $5.8 million after a profit of $26.5 million a year earlier because of a $46.6 million write-down on an Australian styrene-chemicals business, the company said. Huntsman said on Sept. 26 it may sell the asset.
Polyurethane profit almost doubled to $193.7 million on higher prices for MDI, or diphenylmethane diisocyanate, the company said. Huntsman is the world's largest producer of MDI, used to make foam for insulation and furniture.
Pigment profit rose 1.8 percent to $22.6 million as prices rose 5 percent. Huntsman shut its plant that makes titanium dioxide, a white pigment, in Lake Charles, La., as Rita approached.
Profit in performance products, which includes surfactants for detergents, dropped 19 percent to $25.5 million. Hurricane outages and repairs will reduce fourth-quarter profit $44 million, Peter Huntsman said. Profit from advanced materials fell 16 percent to $41.3 million.
Revenue in the third quarter of 2004 was $2.93 billion.
Huntsman in February raised $1.59 billion for the company and some shareholders by selling 55.7 million common shares and 5.75 million preferred shares.
Jon Huntsman Sr., the company's billionaire founder and chairman, is the father of CEO Peter Huntsman and Utah Gov. Jon Huntsman Jr.
Dow Chemical Co. is the largest U.S. chemical maker by 2004 sales, followed by Exxon Mobil Corp. and DuPont Co.