Lubrizol Announces Third-Quarter Earnings/Increases Full-Year Earnings Guidance
November 4, 2009
CLEVELAND - The Lubrizol Corp. announced that consolidated earnings for the third quarter ended Sept. 30, 2009, were $170.5 million, or $2.46 per diluted share, including after-tax restructuring and impairment charges of $3.9 million, or $.06 per diluted share. These charges primarily were related to the closure of production facilities in the Lubrizol Advanced Materials segment and additional expenses associated with the cost reduction actions the company initiated in the first quarter of 2009. Comparable earnings for the third quarter of 2008 were $63.2 million, or $0.92 per diluted share, which included after-tax restructuring and impairment charges of $3.8 million, or $.06 per diluted share, primarily related to the closure of a Lubrizol Additives blending facility in Canada and business improvement initiatives in the company's Performance Coatings product line.
Consolidated revenues for the third quarter decreased 6 percent to $1.27 billion compared with $1.36 billion in the third quarter of 2008. The year-over-year decrease in revenues was attributable to lower volumes and unfavorable currency that more than offset an improvement in the combination of price and product mix. Included in these factors was the incremental impact from acquisitions completed in 2008, which contributed 2 percent to consolidated revenues in the third quarter of 2009.
Excluding the restructuring and impairment charges in both periods, adjusted earnings were $174.4 million, or $2.52 per diluted share, for the third quarter of 2009 compared with $67.0 million, or $.98 per diluted share, for the third quarter of 2008.
Adjusted earnings per share for the third quarter of 2009 increased compared with the prior-year third quarter largely due to disciplined margin management, cost savings initiatives that lowered manufacturing costs and reduced selling, technical, administrative and research (STAR) expenses, contributions from the 2008 acquisitions, and an insurance recovery for previously incurred environmental remediation costs. These positive factors impacting earnings more than offset the effect of lower volume, increased performance-based compensation expense and higher net interest expense. The company increased its Sept. 14, 2009, earnings guidance.
The company's guidance for 2009 earnings is now in the range of $6.82 to $7.02 per diluted share, including restructuring and impairment charges of $.28 per diluted share, primarily related to cost reductions initiated in the first quarter of 2009, impaired preliminary process engineering design work and the closure of production facilities.