Ashland Inc. expects lower December quarter earnings

10-Jan-2003

Ashland Inc. said today it expects earnings from continuing operations for the December quarter, the first quarter of its 2003 fiscal year, to fall short of analysts' expectations, primarily because of an unusually wet autumn in certain parts of the country and the recent run-up in crude oil prices.

Ashland Inc. Chairman and Chief Executive Officer James J. O'Brien said Ashland's APAC road construction business will likely report near break-even results for the December quarter, due to higher-than-usual precipitation in much of its operating area. According to the National Oceanic and Atmospheric Administration, rainfall in October was among the highest levels on record in nine of the 14 states in which APAC operates. The months of November and December also posted above-average precipitation in most of APAC's geographic markets.

In addition, Ashland's profits from its 38 percent interest in Marathon Ashland Petroleum LLC have been adversely affected by rapidly rising crude oil prices in recent weeks, which have squeezed profit margins. The increases stem largely from supply uncertainty due to the labor strike affecting oil production in Venezuela and continuing uncertainty over Iraq.

Ashland will announce results for the December quarter at 8 a.m. (EST) on Thursday, Jan. 23. Concurrent with the release, Ashland will conduct an analysts' meeting in New York on Jan. 23 beginning at 8 a.m. for the investment community. Participants will include O'Brien and J. Marvin Quin, senior vice president and chief financial officer, and David J. D'Antoni, senior vice president and group operating officer. They will discuss Ashland's results for the December quarter and the factors contributing to them. Ashland also expects results of previously announced studies of future asbestos claims and probable insurance recoveries to be completed this month and plans to adjust its reserves accordingly. This topic will also be discussed at the presentation, which will be available by live audio webcast.

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