Huntsman said Chinese demand is returning
(Reuters) - Huntsman Corp's fourth-quarter profit beat Wall Street expectations and the chemicals maker gave an upbeat report on sales in the first quarter, pushing its shares sharply higher.
The company said Chinese demand for its products is returning, business in Europe is stabilizing, and North American operations are improving -- solid signs during the economic recovery.
"I have seen, particularly since the end of the Chinese New Year, a resurgence in orders," said Chief Executive Peter Huntsman. "If that is restocking, if it is people pre-buying ahead of our price increases, or if it is a genuine economic uplift, I don't know. But from the fourth quarter I am seeing volume increasing."
Huntsman shares jumped 8.5 percent to $14.10 in afternoon trading.
Higher prices for chemicals used to make insulation and paint boosted fourth-quarter results.
For the quarter, the company posted net income of $105 million, or 44 cents per share, compared with $30 million, or 12 cents per share, a year ago.
Excluding one-time items, Huntsman earned 28 cents a share. By that measure, analysts expected 27 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 9 percent to $2.63 billion. Analysts expected $2.69 billion.
Revenue gains were greatest in the polyurethanes unit, which makes products for insulation markets, and the pigments unit, which makes titanium dioxide pigment for paint. Price hikes in both units also lifted results.
DuPont is a major rival in the titanium dioxide space.
Huntsman's textile effects unit saw sales fall 8 percent as customers bought fewer specialty clothing materials.
The high price of cotton has affected the textiles unit, as many of the company's customers are choosing to blend more synthetic material into clothing, Huntsman said.
Clothes made with cotton require more of the company's chemicals than clothes made with polyester, Huntsman said. "We need to see people by wool and cotton textile materials," he said.
The fourth-quarter results are the first since Jon Huntsman Jr, the former U.S. presidential candidate, son of the company's founder and brother to the chief executive, joined the company's board of directors.
"He brings a great capacity to widen the doors into international markets," Peter Huntsman said of his brother. "He's got a great knowledge of the business."
He added that he does not believe his brother will be a candidate for vice president of the United States.