W.R. Grace's net income plummets 40%

Higher costs erode first-quarter profit

April 25, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

W. R. Grace & Co., which filed for bankruptcy protection April 2, reported that its net income fell 40 percent in the first quarter as higher costs eroded profit.

The Columbia-based chemical maker earned $14.6 million, or 22 cents a share, in the three months that ended March 31, down from $24.2 million, or 35 cents a share, in the first quarter of last year.

Analysts, on average, had expected earnings of 28 cents a share.

Sales in the period were $395.7 million compared with $384.7 million in the corresponding period a year ago.

The company said the most recent quarter's numbers were off because of higher prices for raw materials and natural gas.

Grace filed for Chapter 11 protection to shield itself from billions of dollars in asbestos-related lawsuits. Before 1973, Grace added asbestos to some of its insulation products, and it formerly operated a vermiculite mine in Libby, Mont., that plaintiffs say harmed their lungs. Vermiculite, which was used in insulation and potting soil, contains naturally occurring asbestos.

"Our decision ... to seek Chapter 11 protection as a way to define and resolve asbestos-related claims was executed with no disruption to our customers," Paul J. Norris, Grace's chairman, president and chief executive officer, said in a statement. "We continue to remain focused on growth and productivity and are anticipating a stronger second half of the year."

Grace's Davison Chemicals segment, also based in Columbia, saw its sales rise 3.3 percent to $198 million, but operating income fell 25 percent to $24.6 million. Davison, which makes silicas and catalysts used to accelerate the chemical reactions in oil refining, operates a plant in South Baltimore.

Shares of Grace closed yesterday at $1.48, up a penny.

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