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Asia hits Union Carbide
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October 26, 1998: 7:19 a.m. ET
Chemical maker blames 53-percent 3Q profit drop on 'market weakness'
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NEW YORK (CNNfn) - Global chemical company Union Carbide Corp. confirmed recent warnings of weak sales on Monday by reporting sharply lower third-quarter earnings deriving from a slump in Asian markets.
The company earned $76 million or 55 cents per share, only half of the $179 million or $1.18 per share reported in the third quarter of 1997. Revenue also slumped to $1.35 billion from $1.65 billion a year ago.
Union Carbide had already alerted investors to the weak quarter, forcing First Call analysts to downgrade recently their earnings expectations from 64 to 53 cents per share.
William H. Joyce, Union Carbide chairman and CEO, said the results "reflected continuing market weakness, particularly in Asia. . . Prices of certain major basic chemicals had fallen to previous trough levels."
The upcoming quarter is unlikely to give the company any relief, Joyce said, citing "continued demand weakness in Asia and the associated erosion in pricing."
The bulk of Union Carbide's profits came from specialty chemicals, of which the company is a key supplier to the paint and coatings industry. The segment accounted for 73.7 percent of sales, bringing in a net profit of $233 million in the quarter.
However, performance from other segments was lackluster. Particularly hard-hit were the company's partnerships, including Aspell Polymeres, a joint venture with French chemists Elf Atochem that lost Union Carbide $38 million in the quarter.
In the year to date, Union Carbide has earned $336 million or $2.41 per share, versus $522 million or $3.49 per share in the applicable year-ago period.
Union Carbide stock (UK) closed 1-1/16 lower at 39-13/16 on Friday. 
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Union Carbide
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