THE JULY-THROUGH-SEPTEMBER period was good to most chemical companies announcing third-quarter results. Of 15 firms that have reported, 10 showed double-digit percentage increases in earnings or better, and only two posted lower earnings compared with third-quarter 2006.
Two industry sectors, fertilizers and industrial gases, showed good results for the quarter. The best performance came from fertilizers, where increases in demand lowered inventories and spurred higher prices.
Mosaic, the larger of the two crop-nutrient producers that C&EN tracks, posted an earnings increase of 180.3% to $305.5 million on a 55.5% jump in sales to $2.0 billion. At Terra Industries, the other fertilizer company, earnings surged a whopping 674.8% to $79.8 million on a 27.7% sales growth to $593.7 million. A key factor, the company says, is a significant increase in U.S. corn acreage.
The two industrial gas companies that reported, Air Products & Chemicals and Praxair, produced good results. Air Products' earnings rose 25.2% to $262.2 million on an 11.5% increase in sales to $2.6 billion. The firm saw higher pricing and volumes in merchant gases and higher volumes in electronics, performance materials, and tonnage gases made at the customer's site.
At Praxair, earnings increased 23.5% to $305.0 million as the company's sales improved 13.0% to $2.37 billion due, the company says, to better pricing and operational efficiencies.
Other companies also experienced good growth in the quarter. Lubrizol's earnings rose 40.3% to $72.8 million on a sales increase of 8.8% to $1.1 billion. CEO James L. Hambrick says the firm enjoyed good sales growth in international markets that more than offset a weak North American market.
Earnings at DuPont, the second-largest U.S. chemical company, grew 30.1% to $566.0 million on a 5.8% increase in sales to $6.7 billion. "We increased sales outside the U.S. 11% and grew worldwide agriculture and nutrition segment sales 21%," says CEO Charles O. Holliday Jr.
Dow Chemical, the U.S.'s largest chemical company, is one of the two firms with lower earnings from continuing operations, excluding significant unusual items. Despite a 10.0% increase in sales to $13.6 billion in the quarter, the company's earnings fell 15.0% to $807.7 million.
The other firm reporting a decline is Albemarle, where earnings dropped 2.6% to $59.1 million on a 3.9% decrease in sales to $584.0 million.