Schulman resumes profitability in North America

12-Jul-10

A. Schulman Inc. has started making profits in North America again, with expectations of an improvement in its overall finances as the global economy continues showing signs of recovery. The company's third-quarter results included contributions from its newest acquisition, Houston-based polymer company ICO Inc. Performance at Schulman’s North American arm has been hampered by high costs, weak demand and deep recessionary economy of the past couple years. Changes in Schulman's North American operations, including cost-cutting measures as well as in production have helped boost performance and will help to consistently achieve profits in the future. Schulman reported US$25.8 mln on revenue of US$420.3 mln for its third quarter ending May 31. Net income rose three fold from US$7.4 mln a year ago. The North American segment’s Q3 profit was US$900,000 compared to a loss of US$2.1 mln a year ago. For the first 9 months of Schulman's fiscal year, North America had an operating profit of US$4 mln, while it had a loss of US$13.4 mln for the same nine-month period a year ago. Schulman’s overall profit of US$36 mln for the first nine months this fiscal year is higher than the US$5.1 mln recorded last year. The company's fiscal year ends Aug. 31. ICO, which makes specialty resins and color concentrates, contributed approximately US$900,000 to Schulman's adjusted net income, all in the last month of the third quarter. European performance should also show improvement but is not likely to return to pre-recession 2008 levels, and fourth-quarter earnings are expected to be further hurt by a weak euro.