Chemtura Corporation (CHMT, Financial) filed Quarterly Report for the period ended 2012-09-30.
Chemtura Corporation has a market cap of $1.58 billion; its shares were traded at around $16.88 with a P/E ratio of 12.7 and P/S ratio of 0.5.
Gross profit for the nine months ended September 30, 2012 was $576 million, an increase of $17 million compared with the nine months ended September 30, 2011. Gross profit as a percentage of net sales increased slightly to 25% for the nine months ended September 30, 2012 compared to 24% in same period of 2011. Gross profit reflected the higher year-on-year selling prices and a $4 million decrease in other costs, offset by a decrease in sales volume of $24 million, unfavorable manufacturing variances and costs of $22 million, the impact of unfavorable foreign currency translation of $8 million, increases in raw materials of $5 million and $3 million in higher accelerated recognition of asset retirement obligation primarily related to the closure of our Pedrendgo, Italy facility. Unfavorable manufacturing variances were driven by lower production volumes, interruptions in plant operations to install new capacity and other unplanned plant outages.
Operating income increased $12 million to $112 million in the nine months ended September 30, 2012 compared with $100 million in the nine months ended September 30, 2011. The increase reflected the favorable selling price increases and $8 million from lower raw material costs, which were offset by $28 million in unfavorable manufacturing costs and absorption variances, $4 million in lower sales volume and a $7 million increase in other costs.
Operating income increased $29 million to $54 million in the nine months ended September 30, 2012 compared with $25 million in the nine months ended September 30, 2011. The primary driver was a decrease in SGA&R of $14 million which reflects the benefit of the restructuring actions taken in 2011 and a reduction of bad debt expense from that recognized in 2011. Operating income also reflected the increase in selling prices, a $7 million benefit from increased sales volume and favorable product mix, $5 million, collectively, in lower raw material, manufacturing, distribution and other costs, partly offset by a $2 million impact from unfavorable foreign currency translation.
During the nine months ended September 30, 2012, accounts receivable increased by $33 million over December 31, 2011 primarily driven by increased sales for our Chemtura AgroSolutions and Industrial Engineered products. Inventory increased by $23 million over December 31, 2011 primarily as a result of inventory build in our Industrial Performance segment due to new products in our Emerald InnovationTM line and lower demand for our tin-based organometallics and traditional polyolefin catalysts as well as seasonal inventory build for our Chemtura AgroSolutions segment. Accounts payable increased by $36 million in the nine months ended September 30, 2012 primarily a result of higher raw material purchases supporting our Chemtura AgroSolutions inventory and our new Emerald InnovationT M products, as well as the timing of vendor payments. Pension and post-retirement health care liabilities decreased $71 million primarily due to the funding of benefit obligations. Pension and post-retirement contributions amounted to $82 million for the nine months ended September 30, 2012 which included $51 million for domestic plans and $31 million for international plans.
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Chemtura Corporation has a market cap of $1.58 billion; its shares were traded at around $16.88 with a P/E ratio of 12.7 and P/S ratio of 0.5.
Highlight of Business Operations:
We reported an income tax expense of $2 million and $13 million for the quarters ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, 2012 and 2011, we reported income tax expense of $9 million and $10 million, respectively. The tax expense reported for the quarter and nine months ended September 30, 2012 reflects fluctuations in jurisdictional profitability, the tax benefit of an impairment charge against certain long-lived assets in our Industrial Performance Products segment, as well as the tax benefit of the second quarter restructuring charge. The tax expense reported for the nine months ended September 30, 2011 included a decrease in deferred foreign income taxes of approximately $17 million that had been recorded in an international jurisdiction in prior years and an increase in foreign income taxes of approximately $5 million relating to a foreign tax matter dating back to the 1990s. The tax benefit was recorded after receiving approval from the international jurisdiction to change our filing position. We have offset our current and prior period quarter and year-to-date U.S. income with net operating loss carryforwards and reduced the associated valuation allowance. We will continue to adjust our tax provision through the establishment or reduction of non-cash valuation allowances until we determine that it is more-likely than not that the net deferred tax assets associated with our U.S. operations will be utilized.Gross profit for the nine months ended September 30, 2012 was $576 million, an increase of $17 million compared with the nine months ended September 30, 2011. Gross profit as a percentage of net sales increased slightly to 25% for the nine months ended September 30, 2012 compared to 24% in same period of 2011. Gross profit reflected the higher year-on-year selling prices and a $4 million decrease in other costs, offset by a decrease in sales volume of $24 million, unfavorable manufacturing variances and costs of $22 million, the impact of unfavorable foreign currency translation of $8 million, increases in raw materials of $5 million and $3 million in higher accelerated recognition of asset retirement obligation primarily related to the closure of our Pedrendgo, Italy facility. Unfavorable manufacturing variances were driven by lower production volumes, interruptions in plant operations to install new capacity and other unplanned plant outages.
Operating income increased $12 million to $112 million in the nine months ended September 30, 2012 compared with $100 million in the nine months ended September 30, 2011. The increase reflected the favorable selling price increases and $8 million from lower raw material costs, which were offset by $28 million in unfavorable manufacturing costs and absorption variances, $4 million in lower sales volume and a $7 million increase in other costs.
Operating income increased $29 million to $54 million in the nine months ended September 30, 2012 compared with $25 million in the nine months ended September 30, 2011. The primary driver was a decrease in SGA&R of $14 million which reflects the benefit of the restructuring actions taken in 2011 and a reduction of bad debt expense from that recognized in 2011. Operating income also reflected the increase in selling prices, a $7 million benefit from increased sales volume and favorable product mix, $5 million, collectively, in lower raw material, manufacturing, distribution and other costs, partly offset by a $2 million impact from unfavorable foreign currency translation.
During the nine months ended September 30, 2012, accounts receivable increased by $33 million over December 31, 2011 primarily driven by increased sales for our Chemtura AgroSolutions and Industrial Engineered products. Inventory increased by $23 million over December 31, 2011 primarily as a result of inventory build in our Industrial Performance segment due to new products in our Emerald InnovationTM line and lower demand for our tin-based organometallics and traditional polyolefin catalysts as well as seasonal inventory build for our Chemtura AgroSolutions segment. Accounts payable increased by $36 million in the nine months ended September 30, 2012 primarily a result of higher raw material purchases supporting our Chemtura AgroSolutions inventory and our new Emerald InnovationT M products, as well as the timing of vendor payments. Pension and post-retirement health care liabilities decreased $71 million primarily due to the funding of benefit obligations. Pension and post-retirement contributions amounted to $82 million for the nine months ended September 30, 2012 which included $51 million for domestic plans and $31 million for international plans.
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