Millennium Chemicals posts a profit of 13 cents a share

But a 4th-quarter loss would have resulted without tax adjustment

February 01, 2002|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

Millennium Chemicals Inc., helped by a one-time income tax adjustment, earned $8 million in the fourth quarter, but posted a loss for the year.

On a per-share basis, the Red Bank, N.J., company, which operates a plant in southern Baltimore, earned 13 cents on sales of $334 million in the three months that ended Dec. 31.

The company benefited from reserves in prior years that reduced the amount it needed to set aside for taxes in the fourth quarter by $42 million. Without the tax adjustment, the company would have reported a quarterly loss of $34 million, or 53 cents per share.

In the fourth quarter the year before, the company earned $14 million on sales of $434 million.

For the year, the company lost $43 million, or 68 cents per share, compared with a profit of $122 million, or $1.89 per share, in 2000.

Millennium is the world's second-largest producer of titanium dioxide, a white pigment used in making paint, plastics and paper.

The company's business has suffered as competition and a weak global economy pushed down the price of titanium dioxide, company officials said. But the company blamed the full-year deficit on losses at Equistar Chemicals LP in Houston, in which it holds a 29.5 percent stake.

The company's other operations basically broke even after interest paid on debt last year, but Equistar, which lost $29 million in the fourth quarter, pushed Millennium into a loss, said Mickey Foster, Millennium's vice president for corporate and investor relations.

Looking forward, Millennium officials said they expect first-quarter financial results to be similar to those of the fourth quarter.

Millennium has taken steps to improve its business, company executives told analysts yesterday in a conference call. It reorganized last year to become leaner and lower costs.

Capital spending last year, at $97 million, was $10 million less than the year before. This year, capital spending is expected to be $60 million to $70 million.

Millennium also plans to raise its price for titanium dioxide by 5 percent to 8 percent next month.

"Millennium will continue to throttle back its plants to match market demand and supply," Foster told analysts. The plants are working at about 80 percent capacity.

Last year, about 250 hourly workers at Millennium's Hawkins Point plant lost their jobs when the company idled its plant there. Another 60 or 70 salaried employees were cut from the company's offices in Hunt Valley. The company has another Hawkins Point facility that makes titanium dioxide.

Millennium's stock closed at $12.19 a share, up 49 cents.

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