ARCO CHEMICAL REPORTS FIRST QUARTER 1992 RESULTS
ARCO CHEMICAL REPORTS FIRST QUARTER 1992 RESULTS NEWTOWN SQUARE, Pa., April 23 /PRNewswire/ -- ARCO Chemical Co.
(NYSE: RCM) today confirmed first quarter 1992 net income of $61 million, or $0.64 per share.
First quarter 199l net income was $52 million, or $0.54 per share, and included $35 million after tax, or $0.37 per share, of income from business interruption insurance. Fourth quarter 1991 net income was $68 million, or $0.71 per share, also including business interruption insurance income of $37 million after tax, or $0.39 per share. First quarter 1992 net income did not include any income from business interruption insurance. Alan R. Hirsig, president and chief executive officer, said: "The strong improvement in operating performance was primarily attributable to lower raw material costs for most of our key feedstocks combined with higher domestic MTBE prices. We are also beginning to see the results of our cost reduction program implemented in the latter half of 1991. The polyols business we acquired continues to improve as we integrate the operations into our existing business and begin to realize the anticipated cost reduction and market opportunities. Although sales volumes for all major products are higher than a year ago, we have not as yet seen the volume growth necessary to indicate a sustained recovery is underway." As compared with first quarter 1991, net margins increased $45 million. Margins in MTBE were up significantly. In Europe, raw material costs declined sharply from their abnormally high 1991 levels caused by the Gulf War. Increased MTBE prices in the United States, coupled with lower raw material costs, contributed to improved margins. Propylene oxide (PO) and derivatives margins were up in the United States but down in Europe as a stronger U.S. dollar offset lower feedstock costs. Styrene monomer (SM) and derivatives margins were essentially unchanged. Net margins increased $43 million from fourth quarter 1991. Slightly higher prices resulted in improved PO and derivatives margins. MTBE margins were up significantly in the United States due to lower costs for butane. SM and derivatives margins were slightly higher but remain depressed due to a continuing weak supply/demand balance. Other income (expense) was ($5) million, compared with $1 million for the first quarter 1991. The decrease in other income was due to lower interest income and higher foreign exchange losses. The company's joint venture in South Korea continues to experience operating losses attributable to high fixed costs, primarily high debt service costs. The losses were partially offset by income from the company's PO/SM joint venture in Japan. Losses for the acquired polyols business, which were included in "Other" for first quarter 1991, are now reported on a consolidated basis. The company currently expects the effective tax rate for 1992 to be 39.6 percent, compared with 41 percent for 1991. In other first quarter 1992 activities, the company received several prestigious quality awards from major automotive manufacturers. Hirsig added, "These awards recognize the achievements of ARCO Chemical's worldwide organization in three areas -- quality, service and technology." ARCO CHEMICAL COMPANY (Unaudited; millions of dollars except per-share data) Three months ended March 31 1992 1991 Sales and other operating revenues $762 $682 Business interruption insurance claim --- 60 Total revenues 762 742 Gross profit 190 174 Selling, general and administrative expenses 52 57 Research and development 15 14 Operating income 123 103 Interest expense (17) (21) Other income (expense), net (A) (5) 1 Income before income taxes 101 83 Provision for income taxes 40 31 Net income $61 $52 Earnings per common share $.64 $.54 (1) Primarily interest income, results from equity and other investments and foreign exchange gains and losses. Depreciation/amortization expense for the three months ended 3/31/92 and 3/31/91 was $47 million and $38 million, respectively. ARCO CHEMICAL COMPANY Sales Volumes Statistics (Unaudited) Three months ended March 31 1992 1991 PO and Derivatives 738 616 (mm lbs.) TBA and Derivatives 269 229 (mm gals.) SM and Derivatives 334 225 (mm lbs.) /delval/ -0- 4/23/92 /CONTACT: Gerald T. Davis (media), 215-359-3198, or Marcia H. Gesser (investors), 215-359-3382, both of ARCO Chemical/ (RCM) CO: ARCO Chemical Company ST: Pennsylvania IN: CHM SU: ERN
CC -- PH030 -- 1891 04/23/92 12:25 EDT
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|Date:||Apr 23, 1992|
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