Omnova Solutions was able to generate higher net income on lower sales for its second quarter ending May 31 compared to a year ago.
The Fairlawn polymer, specialty chemicals and decorative products company on Wednesday reported earning $7 million, or 15 cents per share, on revenue of $307.5 million.
That compares to net income of $6.2 million, or 14 cents per share, on revenue of $312.8 million for the second quarter a year ago.
Sales were down primarily because of $21.1 million in volume declines and $3.5 million in unfavorable currency translations; those declines were offset in part by $19.3 million in price increases to recover higher raw material costs, the company said.
Omnova reported its results after the stock market closed.
Shares of Omnova on Wednesday rose 13 cents, or 1.7 percent, to $7.67. Shares are up 66.4 percent since Jan. 1 and are down 4.7 percent from a year ago.
“The second quarter 2012 financial results were solid, considering the weak global economy and higher raw material costs,” Kevin McMullen, Omnova’s chairman and chief executive officer, said in a statement. “Our results reflect the fundamental improvements we have made to our company, including our globalization initiatives, expansion of our specialty chemicals capability through the Eliokem acquisition and the repositioning of our decorative products segment to be a positive contributor after the divestitures of our wallcovering businesses.”
Omnova was hurt in part during the second quarter by significantly higher raw material costs compared to previous years, McMullen said.
“However, as we enter the third quarter, raw material prices are declining as a result of improved supply and a weaker global economy,” he said.
The company had positive cash flow and increased its cash balances by $9 million to more than $133 million, McMullen said.
The gross profit of Omnova increased by almost 8 percent since Jan. 1 to $120.9 million compared to the same period a year ago despite weak demand and volatile raw materials, McMullen said.
McMullen will take part in a conference call with industry analysts at 11 a.m. today.
The public can listen to the conference call online by going to www.omnova.com.
Jim Mackinnon can be reached at 330-996-3544 or email@example.com