Small profit made in 2Q, Millennium Chemicals says

One-time $3 million gain yields a net of $1 million

August 01, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Millennium Chemicals Inc. said yesterday that it made a slight profit in the second quarter, thanks to a one-time $3 million gain.

The New Jersey-based maker of acetyls and titanium dioxide - a white pigment used in paints and paper - had a net income in the three months that ended June 30 of $1 million, or a penny a share, compared with a loss in the year-ago period of $23 million, or 37 cents a share.

Last year's second-quarter loss included a $20 million charge related to the company's September idling of a large portion of its titanium dioxide plant in Baltimore; about 250 workers were laid off.

Sales in the quarter were down 3 percent from $419 million to $405 million. Selling, development and administrative expenses fell from $35 million to $21 million.

"I think it was a pretty good quarter," said analyst Sergey Vasnetsov of Lehman Brothers in New York. "The numbers came in better than we expected."

Lehman recently raised its outlook on Millennium from "market perform" to "buy."

The $3 million after-tax gain came because Millennium had overestimated the cost of certain liabilities in years past.

"Solid demand for Millennium's products in most markets is supporting price increases," William M. Landuyt, chairman and chief executive, said in a statement. "And continued improvement in operating results is expected for Millennium's wholly owned businesses in the second half of 2002."

Sales in the titanium dioxide division were up 7 percent to $300 million compared with the year-ago period; sales of acetyls - chemicals for use in adhesives, paints, and textile and paper coatings - were down 15 percent to $83 million; and specialty chemicals sales were down 4 percent to $22 million.

The figures were rosier when compared with the previous quarter's numbers. Compared with the first quarter of the year, titanium dioxide sales were up 14.5 percent and acetyls rose 28 percent. Specialty chemicals, though, fell 8 percent.

The company's year-to-date capital spending was $25 million compared with $61 million during the first six months of last year.

"Cash used for capital spending remained at a very low level as we continued to defer all but the most critical, or short payback, discretionary projects," John E. Lushefski, senior vice president and chief financial officer, said in a conference call.

Shares of Millennium gained 80 cents yesterday, or 7 percent, to close at $12.25 on the New York Stock Exchange.

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