PolyOne swings to Q4 loss

07-Feb-09

PolyOne Corporation has swung to a net loss of US$282.6 mln ($3.07 per share) in Q4 2008 compared with net income of US$7.1 mln ($0.08 per diluted share) in the same period last year due volatility in raw material, enrgy costs and inventory destocking trends prevalent across customer segments. Before special items, the company reported earnings of $0.08 per share in the quarter matching the $0.08 per share amount reported in the fourth quarter of last year. For FY 2008, PolyOne reported a net loss of $2.94 per share compared with net income of $0.12 per diluted share in 2007. Before special items, PolyOne reported earnings per share of $0.41 in 2008 - equal to that reported in 2007. Stephen D. Newlin, chairman, president and chief executive officer commented, "We believe the volume declines observed during the fourth quarter were at least partially due to customer inventory destocking, and we have yet to see that trend reverse. Three weeks ago, we announced additional cost cutting measures and restructuring actions that will allow PolyOne to remain competitive through the near-term economic downturn. We believe these actions set the stage for significant earnings improvement when the economy ultimately recovers." Special items in the fourth quarter included a tax valuation allowance of US$104.5 mln against U.S. deferred tax assets. The non-cash goodwill impairment charge of US$170 mln related to the Company's Geon Compounds and Specialty Coatings reporting units within the Performance Products and Solutions Segment. In addition, they also include US$26.6 mln of pre-tax charges related to the combined restructuring actions announced on January 15, 2009 and announced on July 28, 2008. The company posted Q4 revenues of US$541.8 mln, a 14.2% decline compared with revenues of US$631.3 mln in the Q4 2007. Price increases and the acquisition of GLS only partially offset an unprecedented decline in demand as volume fell 24% from the fourth quarter of 2007 to the fourth quarter of 2008.