Printer Friendly

UNION CARBIDE REPORTS SECOND QUARTER NET INCOME OF $38 MILLION COMPANY RAISES COST REDUCTION GOAL TO $575 MILLION

 DANBURY, Conn., July 28 /PRNewswire/ -- Union Carbide Corporation (NYSE: UK) today reported net income available to common shareholders of $38 million, or $0.24 per common share, for the second quarter of 1993. Current quarter results include a loss of $5 million, or $0.03 per common share, from the sale in May of the company's investment in Vitaphore Corporation, a biomedical products subsidiary, to Integra LifeSciences Corporation.
 In the comparable period last year, Union Carbide reported net income from continuing operations available to common shareholders of $33 million, or $0.24 per common share based upon fewer shares outstanding. This included an after-tax gain of $13 million, or $0.10 per common share, from the sale of Union Carbide's investment in Exel Limited, a casualty insurance company. Second quarter 1992 earnings shown above do not include income from discontinued operations of $34 million, or $0.26 per common share (representing earnings of Praxair, Inc., prior to its spin-off on June 30, 1992).
 Union Carbide Chairman Robert D. Kennedy said that "margins continued tight in many areas, especially in the polyethylene and ethylene glycol markets. Any volume gains have more than been offset by depressed prices, chiefly due to overcapacity in key product lines." He credited Union Carbide's improved joint venture performance, cost controls and debt refinancing efforts for the increase (excluding special items) in year-to-year second quarter income from continuing operations.
 New Cost Reduction Goal
 Carbide also announced that it has raised to $575 million (measured in 1990 dollars) its earlier cost reduction target of $400 million a year by the end of 1994. As previously reported, the company will reach its $400 million cost reduction target by the end of 1993, a year ahead of schedule.
 Mr. Kennedy said continued attention to work processes in maintenance, inventory control, production and distribution activities creates new savings opportunities. "Streamlining of corporate staff, information technology, finance and engineering activities will contribute the rest of the savings increment," Mr. Kennedy added. "When these efforts succeed, Carbide's service structure and capabilities, and overhead costs should be comparable to the best and most efficient companies."
 Carbide To Adopt Financial Accounting Standard 112
 In addition, Union Carbide announced that it expects to adopt Statement of Financial Accounting Standards 112, "Employers' Accounting for Postemployment Benefits," in the third quarter of 1993. This standard, which all companies must adopt by 1994, requires that postemployment benefits paid before retirement, principally severance, be accrued over employees' working lives.
 The cumulative effect of this anticipated change in accounting principle would not affect 1993 income from continuing operations. It would reduce 1993 net income by an estimated $80 million to $100 million, and includes additional severance costs related to the company's cost reduction programs. As previously reported, third quarter 1993 earnings will include the gain from the sale of the company's organosilicon business ($32 million; $0.21 per share), which will be largely offset by the costs associated with the shutdown of the ethylene oxide/glycol manufacturing facility in Montreal-East, Canada.
 Worldwide sales for the second quarter of 1993 were $1.244 billion, compared to $1.257 billion in the 1992 second quarter. Worldwide sales for the first six months of 1993 were $2.437 billion, compared with $2.444 billion for the prior year.
 Net income available to common stockholders for the first six months of 1993 was $78 million, or $0.52 per common share. Net income from continuing operations for the first six months of 1992 was $70 million, or $0.51 per common share. Income of $67 million from discontinued operations partially offset an after-tax charge of $361 million, reflecting the cumulative effect of changes in accounting principles for FAS 106 and 109. This resulted in a $224 million loss for the first half of 1992, or $1.74 per common share.
 UNION CARBIDE CORPORATION AND SUBSIDIARIES
 Condensed Consolidated Statement Of Income
 (Millions of dollars, except per share figures)
 Quarter ended June 30 1993 1992(a)
 NET SALES $ 1,244 $ 1,257
 Deductions (additions)
 Cost of sales, exclusive of depreciation and
 amortization shown separately below 961 984
 Research and development 38 38
 Selling, administrative and other expenses(b) 94 97
 Depreciation and amortization 68 73
 Interest on long-term and short-term debt 16 42
 Other expense (income) 12 (23)
 INCOME BEFORE PROVISION FOR INCOME TAXES -
 CONTINUING OPERATIONS 55 46
 Provision for income taxes 18 9
 INCOME OF CONSOLIDATED COMPANIES -
 CONTINUING OPERATIONS 37 37
 Plus: UCC share of net income (loss) from
 corporate investments carried at equity 4 (1)
 INCOME FROM CONTINUING OPERATIONS 41 36
 Income from discontinued operations, net of
 income taxes and minority interest - 34
 Net income before cumulative effect of change in
 accounting principles 41 70
 Cumulative effect of change in accounting principles - -
 NET INCOME 41 70
 Preferred stock dividend, net of taxes 3 3
 NET INCOME - COMMON STOCKHOLDERS $ 38 $ 67
 Earnings per common share
 Primary(c)
 - Income from continuing operations $ 0.24 $ 0.24
 - Income from discontinued operations $ - $ 0.26
 - Net income - common stockholders $ 0.24 $ 0.50
 Fully diluted(d) $ 0.24 $ 0.48
 (a) Restated to reflect the adoption of Statement of Financial Accounting Standards (FAS) 106 and FAS 109.
 (b) Selling, administrative and other expenses include:
 Selling $ 38 $ 38
 Administrative 34 37
 Other expenses 22 22
 Total $ 94 $ 97
 (c)Based on 154,951,616 shares (131,237,191 shares in 1992).
 (d)Based on 171,829,511 shares (150,647,374 shares in 1992).
 UNION CARBIDE CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF INCOME
 (Millions of dollars except per share figures)
 Six Months ended June 30 1993 1992(a)
 NET SALES $ 2,437 $ 2,444
 Deductions (additions)
 Cost of sales, exclusive of depreciation and
 amortization shown separately below 1,841 1,859
 Research and development 75 77
 Selling, administrative and other expenses(b) 185 190
 Depreciation and amortization 144 149
 Interest on long-term and short-term debt 41 93
 Other expense (income) 36 (39)
 INCOME BEFORE PROVISION FOR INCOME TAXES -
 CONTINUING OPERATIONS 115 115
 Provision for income taxes 38 34
 INCOME OF CONSOLIDATED COMPANIES -
 CONTINUING OPERATIONS 77 81
 Plus: UCC share of net income (loss) from
 corporate investments carried at equity 6 (3)
 INCOME FROM CONTINUING OPERATIONS 83 78
 Income from discontinued operations, net of
 income taxes and minority interest - 67
 Net income before cumulative effect of change in
 accounting principles 83 145
 Cumulative effect of change in accounting principles - (361)
 NET INCOME (LOSS) 83 (216)
 Preferred stock dividend, net of taxes 5 8
 NET INCOME (LOSS) - COMMON STOCKHOLDERS $ 78 $ (224)
 Earnings per common share
 Primary(c)
 - Income from continuing operations $ 0.52 $ 0.51
 - Cumulative effect of change
 in accounting principles $ - $ (2.77)
 - Income from discontinued operations $ - $ 0.52
 - Net income (loss) - common stockholders $ 0.52 $ (1.74)
 Fully diluted(d) $ 0.50 $ -
 (a) Restated to reflect the adoption of Statement of Financial Accounting Standards (FAS) 106 and FAS 109.
 (b) Selling, administrative and other expenses include:
 Selling $ 72 $ 73
 Administrative 66 75
 Other expenses 47 42
 Total $ 185 $ 190
 (c) Based on 147,752,885 shares (130,530,756 shares in 1992).
 (d) Based on 173,957,729 shares (Fully diluted loss per share in 1992 was antidilutive).
 -0- 7/28/93
 /CONTACT: Tomm F. Sprick of Union Carbide, 203-794-6992/
 (UK)


CO: Union Carbide Corporation ST: Connecticut IN: CHM SU: ERN

SM -- NY010 -- 6573 07/28/93 08:05 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 28, 1993
Words:1220
Previous Article:ACME UNITED REPORTS SECOND QUARTER RESULTS
Next Article:PRAXAIR REPORTS SECOND QUARTER RESULTS
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters