Union Carbide Reports Strong 4th Quarter Earnings
Union Carbide Corporation (UCC) reported fourth quarter 1999 earnings of $0.68 per diluted common share, compared to $0.57 in the third quarter of 1999 and $0.49 for the same period in 1998. Earnings from the third quarter of 1999 and the fourth quarter of 1998 include per share gains from litigation settlements of $0.21 and $0.31, respectively.
"Our earnings reflected continuing high volumes, improved pricing in Basic Chemicals & Polymers (BC&P) and strengthening performance by our joint ventures, EQUATE and Polimeri Europa. These gains were partially offset by higher raw material costs," said Dr. William H. Joyce, Carbide's Chairman and Chief Executive Officer. "EQUATE's improved performance benefited from its high operating rates and the ability to capitalize on its advantaged feedstock cost position. Partnership income was negatively impacted by losses associated with the corporation's Aspell joint venture and the continued weakness in earnings from UOP."
Net income available to common stockholders for the quarter totaled $94 million, compared to $77 million in the third quarter and $67 million for the same period a year ago. Sales in the fourth quarter totaled $1.552 billion, compared to $1.498 billion in the prior quarter and $1.289 billion for the same period in 1998.
UCC's Specialties & Intermediates (S&I) segment reported operating profit of $77 million, compared to $134 million in the third quarter of 1999 and $232 million in the fourth quarter of 1998. Both the third quarter of 1999 and the fourth quarter of 1998 include gains from the settlement of litigation associated with the licensing business. The combination of weak pricing, increased raw material costs and poor partnership results adversely affected segment earnings.
Carbide's BC&P segment reported an operating profit of $61 million, compared to operating losses of $7 million in the third quarter of 1999 and $45 million in the fourth quarter of 1998. Continued high sales volumes and higher average selling prices were responsible for this quarter's improved performance.
Carbide's Other segment reported a fourth quarter 1999 loss of $30 million that was primarily the result of environmental expenses of a discontinued business.
For the full year 1999, UCC reported net income available to common stockholders of $311 million, or $2.27 per diluted common share before an after-tax charge of $0.14 per diluted share representing the cumulative effect of a required change in an accounting principle. Prior year earnings available to common stockholders were $403 million, or $2.91 per diluted common share. Worldwide sales for 1999 were $5.870 billion, compared to $5.659 billion in 1998.
Sales volumes for the year reached a record high of 16.8 billion pounds, an increase of 13.9 percent over 1998. The corporation's fixed cost per pound of products sold decreased to $0.102 per pound, down from $0.115 per pound in 1998 and $0.155 per pound in 1991.