Millennium posts a loss of $5.29 a share

First-quarter deficit includes $305 million for goodwill write-down

May 03, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Millennium Chemicals Inc. said yesterday that it lost more than $300 million in the first quarter, partly because of a change in accounting practices.

The company, which has a titanium dioxide plant in southern Baltimore, lost $336 million, or $5.29 a share, in the three months that ended March 31, compared with a loss of $15 million, or 24 cents, in last year's first quarter. The recent quarter's loss included a goodwill write-down of $305 million.

New rules from the Financial Accounting Standards Board require companies to write off their good will - the premium paid for an acquisition above the value of the tangible assets acquired - all at once, instead of amortizing it over decades. The goodwill write-down was related to Millennium's 29.5 percent stake in Houston-based Equistar Chemicals LP, a maker of plastics, and certain acquisitions in its acetyls segment.

Sales in the quarter fell 21 percent, to $351 million from $444 million.

"Millennium reported a net loss reflecting the difficult economic and business conditions in the first quarter of 2002," said William M. Landuyt, chairman and chief executive of the Red Bank, N.J., company.

The titanium dioxide segment - which makes the white pigment that is used in things such as toothpaste, U.S. currency and the writing on M&M candy - reported operating income of $10 million, compared with $28 million in the year-earlier quarter.

At the Hawkins Point plant in Baltimore, production last month was cut by about 40 percent after the failure of a city water main. The plant is using an alternative line, and production is back to normal.

The acetyls segment reported an operating loss of $7 million, compared with a loss of $3 million in last year's quarter. The specialty chemicals division was steady, with $4 million in operating income in the first quarters of this year and last year.

Millennium's stake in Equistar brought a first-quarter loss of $39 million, compared with a $24 million loss in last year's quarter.

A portion of the Baltimore plant was idled last summer, and about 225 workers were laid off. A few have been rehired as openings become available through attrition. The plant now has about 175 workers.

Shares of Millennium rose $1.50 yesterday, to $15.20.

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