Ashland Inc. reports record earnings from operations for June quarter
Ashland Inc.reported net income of $1.8 billion for the quarter ended June 30, the third quarter of the company's 2005 fiscal year. These results include a $1.5 billion net gain on the sale of Ashland's 38-percent interest in Marathon Ashland Petroleum LLC, its maleic anhydride business and 60 Valvoline Instant Oil Change centers (collectively referred to as the "MAP Transaction") and the repayment of most of Ashland's debt with the proceeds. Excluding this gain, net income for the June 2005 quarter was $231 million, or $3.09 a share, compared to $161 million, or $2.26 a share, for the quarter last year.
"The completion of the MAP Transaction marked an extraordinary milestone in Ashland's history," said James J. O'Brien, Ashland Inc. chairman and chief executive officer. "After 81 years in the petroleum refining and marketing industry, Ashland is now focused on growth as a two-sector company with operations in chemicals and transportation construction."
The Transportation Construction Sector, commercially known as Ashland Paving And Construction, Inc. (APAC), reported operating income of $46 million for the June 2005 quarter, compared to $43 million in the 2004 quarter. APAC achieved record third-quarter operating income despite rising hydrocarbon costs. At June 30, APAC's construction backlog, which consists of work awarded and funded but not yet performed, was $2.1 billion, up 12 percent from the same period last year.
The Chemical Sector, which includes the Ashland Distribution, Valvoline and Ashland Specialty Chemical divisions, performed well during the quarter. Operating income amounted to $105 million for the June 2005 quarter, a 40-percent improvement over the June 2004 quarter. Margins drove stronger earnings.
Ashland Distribution achieved record operating income for the June 2005 quarter of $36 million, marking the sixth consecutive record quarter in operating income. The division has sustained its exceptional performance by maintaining margins in the face of rising raw material costs, managing expenses and aggressively expanding its sales reach. Margin improvement more than offset a volume decline of 4 percent.
Valvoline's operating income for the June 2005 quarter was $26 million, down 13 percent primarily due to the combination of a 4-percent decrease in lubricant sales volumes in a soft motor oil market and higher raw material costs. Valvoline International reported a record quarter, with operating income improving by 31 percent due mainly to better earnings from operations in Europe.
Ashland Specialty Chemical reported operating income for the June 2005 quarter of $43 million, up 95 percent over the 2004 quarter. Strong performance resulted from better margins coupled with a 6-percent volume increase. Margin improvement reflects rising prices and partial abatement of rising raw material costs.
Other news from the department business & finance
Get the chemical industry in your inbox
From now on, don't miss a thing: Our newsletter for the chemical industry, analytics, lab technology and process engineering brings you up to date every Tuesday and Thursday. The latest industry news, product highlights and innovations - compact and easy to understand in your inbox. Researched by us so you don't have to.
