MOSCOW (MRC) -- Plastic manufacturer A. Schulman Inc. swung to a loss in the third quarter, as results were again battered by a stronger dollar, said The Wall Street Journal.
It was the second consecutive quarter the Fairlawn, Ohio, company reported a loss against analysts’ projections of a profit. Though based in the U.S., Schulman does most of its business outside the country and has been hit hard by falling demand in Europe and a weaker euro.
Shares, up 4% this year, fell nearly 7% to USD39.28 in after-hours trading as the company cut its projections for the year, citing its recent HGGC Citadel Plastics Holdings Inc. acquisition and the effect of a capital restructuring.
Schulman said it now projects profit of USD2.37 to USD2.42 a share for the year that ends in August, compared with its earlier view of USD2.50 to USD2.55 a share. In 2014, Schulman reported profit of USD2.36 a share.
In the latest period, revenue from Europe, the Middle East and Africa fell to USD326.3 million, a 21% decline, or 1.9% excluding currency fluctuations. The stronger dollar also impacted sales in Latin America, down 9.9% in the latest period.
Meanwhile, Schulman said sales rose 4.1% in the U.S. and Canada and by 4.3% in the Asia Pacific region, bolstered by recent acquisitions.
Overall, Schulman reported a loss before convertible special dividends of USD9.3 million for the period ended May 31, compared with a year-earlier profit of USD19.1 million. On a per-share basis, the loss was 34 cents, down from a year-earlier profit of 65 cents a share.
Excluding restructuring- and acquisition-related costs and other items, profit fell to 72 cents from 74 cents a share a year earlier.
Net sales fell 13% to USD560.9 million, with currency fluctuations impacting sales by about USD91.4 million, Schulman said.
As MRC informed before, A. Schulman Inc. plans to spend 5 million to EUR7 mln (USD5.5 mln to USD7.7 mln) on a new masterbatch facility in Turkey, to tap into market growth in the region. The facility, in the greater Istanbul area, will have annual production capacity of about 40 million pounds of the company’s additive, white and breathable masterbatches for the food and industrial packaging markets, the company said. It’s expected to be in production at the end of the Fairlawn, Ohio-based company’s 2016 fiscal year, which closes Aug. 31, 2016.
A. Schulman is a global plastics supplier, headquartered in Akron, Ohio, and a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. A. Schulman has 33 manufacturing facilities globally. A. Schulman's fiscal third-quarter earnings fell 69% amid continued sluggishness in European markets and higher-than-expected costs in Latin America, where the company has been consolidating its Brazilian operations. A. Schulman reported net sales of approximately USD2.5 billion for the fiscal year ended August 31, 2014.