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Olin Corp. Reports Operating Results (10-Q)

July 24, 2012 | About:
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10qk

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Olin Corp. (OLN) filed Quarterly Report for the period ended 2012-06-30.

Olin Corporation has a market cap of $1.73 billion; its shares were traded at around $19.58 with a P/E ratio of 11.5 and P/S ratio of 0.9. The dividend yield of Olin Corporation stocks is 3.7%. Olin Corporation had an annual average earning growth of 4.7% over the past 10 years.

Highlight of Business Operations:

Sales for the three months ended June 30, 2012 were $508.7 million compared to $529.1 million in the same period last year, a decrease of $20.4 million, or 4%. Chlor Alkali Products sales decreased $17.1 million, or 4%, primarily due to decreased volumes, partially offset by higher ECU prices. Our ECU netbacks, including SunBelt, increased 3% compared to the same period in the prior year. Winchester sales decreased by $3.3 million, or 2%, from the three months ended June 30, 2011 primarily due to decreased shipments to law enforcement agencies.

Sales for the six months ended June 30, 2012 were $1,015.9 million compared to $965.1 million in the same period last year, an increase of $50.8 million, or 5%. Chlor Alkali Products sales increased $43.2 million, or 6%, primarily due to higher ECU prices and the ownership of SunBelt for the full period. Our ECU netbacks, including SunBelt, increased 7% compared to the same period in the prior year. Winchester sales increased by $7.6 million, or 3%, from the six months ended June 30, 2011 primarily due to higher selling prices and increased shipments to domestic commercial customers, partially offset by lower shipments to law enforcement agencies.

Chlor Alkali Products sales for the three months ended June 30, 2012 were $363.2 million compared to $380.3 million for the three months ended June 30, 2011, a decrease of $17.1 million, or 4%. The sales decrease was primarily due to lower chlorine and caustic soda volumes of 11%, partially offset by higher ECU pricing, which increased 3% from the three months ended June 30, 2011. Bleach volumes increased 9% for the three months ended June 30, 2012 compared to the same period last year, while hydrochloric acid volumes also increased 7% compared to the three months ended June 30, 2011. Our ECU netback, including SunBelt, was approximately $575 for the three months ended June 30, 2012 compared to approximately $560 for the three months ended June 30, 2011. Freight costs included in the ECU netback increased 7% for the three months ended June 30, 2012, compared to the same period last year. Our operating rate for the three months ended June 30, 2012 was 79%, compared to the operating rate of 85% for the three months ended June 30, 2011. The lower operating rate for 2012 resulted from lower chlorine demand.

Chlor Alkali Products sales for the six months ended June 30, 2012 were $722.9 million compared to $679.7 million for the six months ended June 30, 2011, an increase of $43.2 million, or 6%. The sales increase was primarily due to higher ECU pricing, which increased 7% from the six months ended June 30, 2011, and increased SunBelt sales of $33.1 million for the additional two months of our ownership. Bleach volumes increased 9% for the six months ended June 30, 2012 compared to the same period last year, while hydrochloric acid volumes also increased 9% compared to the six months ended June 30, 2011. Our ECU netback, including SunBelt, was approximately $580 for the six months ended June 30, 2012 compared to approximately $540 for the six months ended June 30, 2011. Freight costs included in the ECU netback increased 4% for the six months ended June 30, 2012, compared to the same period last year, primarily due to higher railroad freight rates. Our operating rate for the six months ended June 30, 2012 was 80%, compared to the operating rate of 83% for the six months ended June 30, 2011.

Chlor Alkali Products generated segment income of $149.4 million for the six months ended June 30, 2012, compared to $118.0 million for the same period in 2011, an increase of $31.4 million. Chlor Alkali Products segment income was higher primarily due to higher ECU netbacks ($32.2 million), higher SunBelt earnings for the additional two months of our ownership ($8.3 million), primarily related to higher ECU netbacks and $7.5 million of additional income on the remaining 50% interest we acquired, and decreased operating costs ($1.7 million). These increases were partially offset by decreased volumes ($10.8 million).

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