A. Schulman Inc.’s top executives aren’t saying specifically how they expect the Fairlawn polymer company will perform financially in its fiscal year.
That means no formal “guidance,” to use financial parlance.
The decision made last year not to forecast earnings and revenue is in large part because of a still-murky global economy and significant volatility in the resin and compound markets where Schulman operates.
In a conference call Friday morning with industry analysts, Schulman Chairman and Chief Executive Officer Joseph Gingo, while still not giving out an earnings forecast, said there are signs from Schulman’s global customers that market volatility is decreasing.
“Right now I would say I’m seeing more steadiness than I have in the last three to four months,” Gingo said.
Even in Europe, where there is a fiscal crisis and fears that the euro could dissolve, Schulman customers have been positive in their outlook, Gingo said. Schulman’s European operations are for the most part not in the nations now in crisis, he said.
Schulman reported after the stock markets closed Thursday that it had net income of $13.6 million, or 46 cents per share, on sales of $517.3 million for its first quarter ending Nov. 30; excluding one-time items, the company said net income was $15.3 million, or 52 cents per share. That’s up from a year ago.
Sales and net income were higher, even though Schulman sold 456.3 million pounds of its products, down 9.2 percent from 502.6 million pounds a year ago.
Shares of Schulman on Friday fell $1.17, or 5.3 percent, to $20.98. Shares, including dividends, are down 0.9 percent since Jan. 1 and are up 6.4 percent from a year ago.
Gingo said at the end of the company’s fourth quarter last year: “We were saying that you get changes within the month. Right now it’s a little more steady, but there’s still uncertainty. There’s more optimism out there.”
Gingo noted that Schulman’s board of directors last October voted to increase the company’s quarterly dividend by 10 percent to 17 cents per share. The next dividend is payable Feb. 1 to shareholders of record Jan. 20.
“This action represents our confidence as well as our board in the strong cash generation and long-term growth prospects …” he said in prepared remarks.
Gingo said Schulman continues to refocus on selling lower volume, higher-profit resins and compounds and not high volume but low-profit commodity products.
The company is building a new factory in India, due to begin operation by the end of the year, and has expanded lines in China and Mexico. It also has invested $7 million in its Akron factory, but will shut down a plant in Nashville by the end of February. Last summer, Schulman sold its facility in Sharon Center that closed in 2010. Gingo said Schulman continues to look at acquisitions.
The bulk of Schulman’s products are used in the packaging and automotive markets. Schulman also sells to the appliance, construction, medical, consumer product, electrical/electronics, office equipment and agriculture markets.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com
