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Cytec Industries Inc. Reports Operating Results (10-Q)

October 28, 2010 | About:
10qk

10qk

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Cytec Industries Inc. (CYT) filed Quarterly Report for the period ended 2010-09-30.

Cytec Industries Inc. has a market cap of $2.46 billion; its shares were traded at around $49.58 with a P/E ratio of 15.2 and P/S ratio of 0.9. The dividend yield of Cytec Industries Inc. stocks is 0.1%.CYT is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Mario Gabelli of GAMCO Investors, Jeremy Grantham of GMO LLC.
This is the annual revenues and earnings per share of CYT over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CYT.


Highlight of Business Operations:

Manufacturing cost of sales was $658.2 or 78.6% of sales in the third quarter of 2010, compared with $605.4, or 81.8% of sales in the third quarter of 2009. The 3.2% decrease in manufacturing cost as a percentage of sales, is primarily due to improved manufacturing cost leverage on the increased volume obtained across our segments and lower restructuring charges. Total manufacturing costs increased by $52.8 due to $64.5 related to increased raw material costs, $25.1 due to higher raw material volumes, and $14.9 due to higher freight and period costs related to the increased sales volumes. Additionally, manufacturing costs increased by $6.3 related to the elimination of the 2009 short term cost reductions discussed above. The third quarter of 2010 includes $3.5 of costs primarily associated with additional restructuring to consolidate our manufacturing operations at one of our European facilities. These increases were partially offset by favorable fixed cost absorption of $20.1 related to the increased sales volume as well as our initiative to lower inventory levels in 2009, favorable changes in exchange rates of $16.1

Selling and technical services expenses were $51.5 in the third quarter of 2010 versus $48.6 in the third quarter of 2009. Research and process development expenses were $18.0 versus $17.2 in the prior year. Administrative and general expenses were $32.8 versus $29.6 in the prior year. Overall operating expenses increased $6.9 due to the elimination of the 2009 short term cost reductions discussed above of $7.0 and higher costs to support increased volumes of $3.5. These negative impacts were partially offset by favorable changes in exchange rates of $2.3 and reduced restructuring costs of $1.4.

Net income for the third quarter of 2010 was $37.7 ($0.75 per diluted share), a $25.2 increase from the net earnings of $12.5 ($0.26 per diluted share) in the same period in 2009. Included in the third quarter of 2010 was $2.2 of after-tax expenses primarily related to restructuring costs discussed above. Included in the third quarter of 2009 was a $15.3 of after-tax expenses related to restructuring costs, an after-tax loss of $5.5 associated with the repurchase of debt under a tender offer, and an after-tax gain of $5.7 associated with the transfer of ownership of land to a third party.

Earnings from operations were $19.5 or 5% of sales in 2010, compared with earnings from operations of $18.5 or 6% of sales in 2009. The $1.0 increase in earnings is principally due to the favorable impacts of $29.9 from higher selling prices, $8.1 of improved plant leverage on increased volume as well as the initiative to lower inventories in 2009, and $6.0 from increased selling volumes. These positive impacts were largely offset by higher raw material costs of $34.7, higher costs of $6.1 related to the elimination of the short term cost savings initiatives and higher manufacturing and operating expenses, increased freight costs of $1.9, and changes in exchange rates of $0.2.

Earnings from operations were $9.1 or 14% of sales in 2010, compared with $3.1 or 5% in 2009. The $6.0 increase in earnings is principally due to the improvement in demand with $3.3 related to improved plant leverage on increased volume as well as the initiative to lower inventories in 2009, $2.7 related to increased selling volumes and improved product mix, and $1.2 related to increased selling prices. These positive impacts were partially offset by increased freight costs of $0.5 due to higher selling volumes, $0.5 due to the elimination of the short term savings initiatives and higher manufacturing and operating expenses, and unfavorable changes in exchange rates of $0.4.

Earnings from operations were $27.9 or 14% of sales in 2010, compared with $18.3 or 11% of sales in 2009. The $9.6 increase in earnings includes increased selling volumes of $15.6, benefits primarily associated with higher fixed cost absorption into inventory due to increased production levels, as well as the initiative to lower inventories in 2009, of $7.9, increased selling prices of $2.7, and changes in exchange rates of $0.9. These positive impacts were partially offset by $15.1 due to the elimination of the short term savings initiatives and higher manufacturing and operating expenses to meet the increasing demand levels and new business opportunities, $1.5 due to higher raw materials costs, and $0.9 due to increased freight costs.

Read the The complete Report

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