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Omnova has higher third-quarter profits

By Katie Byard
Beacon Journal business writer

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Omnova Solutions Inc., the Fairlawn surfaces and laminates maker, said Monday that its profit jumped to $9 million for the third quarter, up from $6.4 million a year ago.

Profit was 19 cents a share, up from 14 cents a share for the third quarter a year ago.

Omnova (NYSE: OMN) also said it expects that fourth-quarter results will be “significantly above” last year’s fourth quarter and similar to the third quarter of 2013.

Full-year 2013 adjusted income from continuing operations, Omnova said, is expected to be at about 2012 levels.

Omnova shares closed down 14 cents to $8.55. Shares are up 22 percent including reinvested dividends in 2013. They are up 13 percent from a year ago.

Earlier this month, the company, with roots dating to the General Tire & Rubber Co. of Akron, said it planned to move from its headquarters on Ghent Road in Fairlawn to a not-yet-constructed corporate office in the Cleveland suburb of Beachwood.

That announcement was not unexpected. The company said in August that it had been searching for a new headquarters site for nearly two years and that Beachwood was a likely location.

On Monday, Kevin McMullen, Omnova’s chairman and chief executive officer, noted in prepared remarks that the company’s third-quarter results were up from those in the fiscal year’s second-quarter earnings, as well as those from last year’s third quarter.

McMullen said cost cutting and a “favorable mix of business” contributed to the improvement in results.

He said the company’s performance chemicals division in the third quarter saw the best sales volumes of fiscal 2013.

The engineered services division saw the highest quarterly operating profit since 2000.

Sales decreased $27 million, or 9.4 percent, to $261.2 million for the third quarter of 2013, compared with $288.2 million for the third quarter of 2012. The sales decrease was driven by lower sales of $10 million, or 3.5 percent, and reduced pricing of $18.7 million, or 6.5 percent, the company said, partially offset by favorable currency exchange translation of $1.7 million.

McMullen said that in the performance chemicals division, the expansion of new specialty chemicals manufacturing in China as well as the consolidation of emulsion manufacturing in the United States, along with new products, should help boost future results.

The engineered surfaces division, he said, is benefiting from the sale of the commercial wall-covering business, consolidation of manufacturing operations and growth in the U.S. housing market.

There are “downside risks” for this year’s fourth quarter, McMullen said. They include lower-than-expected sales in Europe and a pressure to cut prices, prompted by competitors in performance chemicals.

Omnova’s current headquarters is across from Summit Mall at Ghent Road and Smith Road. The company is retaining its technology center and factory in Akron, as well as its Mogadore facility.

Katie Byard can be reached at 330-996-3781 or kbyard@thebeaconjournal.com.


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