Three Companies, Two Directions

Three major chemical companies???DuPont, Rohm and Haas, and PPG Industries???have reported first-quarter earnings, and it can easily be said that the results are mixed. Earnings declined at DuPont but were higher at the other two.

Rohm and Haas scored a 30.2% increase in earnings compared with the first quarter of 2005 to $207.0 million on a slight 3.0% increase in sales to $2.08 billion. The company's earnings include charges from stock-based compensation adjustments.

Rohm and Haas saw good demand growth in its large chemical businesses with plastics additives sales up 13%, process chemicals up 10%, and architectural and functional coatings up 6%.

CEO Raj L. Gupta says, "We have been successful in executing portfolio management strategies to shed underperforming business while maintaining our focus on selling technically advanced, higher growth, and higher margin product lines." And he notes, "From an operations standpoint, we maintained a tight focus on controllable expenses."

PPG reported earnings, excluding unusual items, of $213.0 million, an 11.5% increase over the first quarter of last year. Sales increased 5.8% to $2.64 billion. CEO Charles E. Bunch says, ???Though energy and raw material costs are still high, we remain optimistic about overall economic prospects and our ability to continue delivering strong financial performance.???

In contrast, DuPont saw earnings fall 10.3% compared with the year-earlier quarter to $867.0 million, as sales declined 0.5% to $7.39 billion. The company says earnings were affected by higher selling prices across all regions, but these were offset by the impact of higher raw material prices and the adverse effect of the stronger dollar.

One thing the three companies had in common: They all beat security analysts' estimates for earnings per share. DuPont, despite its earnings decline, earned 93 cents per share, much higher than the 80 cents per share forecast by analysts. Rohm and Haas also posted 93 cents per share against analysts??? projections of 90 cents. And PPG???s $1.28 per share beat estimates of $1.07 per share.