A Optimistic ENDING TO A Difficult YEAR

Inside the Fourth QUARTER, caffeine sector reversed a three-quarter trend related with declining earnings. The 23 firms tracked by C&EN posted the average rise in profits for 5.8% in contrast to the year-ago period.

But sales for the three months didn't grow, and then results for the full year were down.

Within diversified chemical firms, several businesses did very well within the quarter, however, many experienced some combination associated with lower demand, higher feedstock costs, plus weaker pricing. At most companies, executives relied on operational controls together with restructuring to boost profit margins in the face connected with flat sales.

The strategies worked. Although 11 related with the 23 firms posted sales declines, only six saw earnings fall. Generally, sales increased merely a 0.3%, nonetheless 12 firms boosted their profit margins in the quarter. For the 365 day, sales shrank 4.8% compared with 2011, but 17 enterprises increased returns.

At Dow Chemical , earnings jumped 26.7% weighed against the year-ago quarter despite a 1.3% sales drop. In a very conference call with analysts, Andrew N. Liveris, the firm's leader officer, credited"stringent price, volume, and then margin focus"for the company's higher earnings. Results were also enhanced by a $413 million decline within the cost relating to purchased feedstock not to mention energy.

Initially about 2012, corporate executives were hopeful that the economy would pick up later in the year, but Liveris told analysts that the opposite happened.The other half of 2012 saw "significant deterioration inside the markets we serve,especially in China." Now the chemical business is facing what he characterizes as a slow-to-no-growth world-wide environment.

Back to top