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What: Shares of chemical maker Ashland were decomposing today, falling as much as 11% after the company came up short in its preliminary earnings report.
So what: Weak demand in emerging markets and a dramatic drop in the price of guar hurt the company. The company took a $31 million loss on straight guar, and overall revenue fell 3% to $1.87 billion, below estimates of $1.9 billion. Earnings per share also missed expectations by $0.27, falling 6.7% to $1.12 per share. CEO James O'Brien expressed his disappointment with the quarter but added: "The biggest issues affecting our performance have been addressed. The inventory issue with the straight guar is now behind us."
Now what: Consumer markets was one bright spot in the report, with a 34% EBITDA increase, and with the guar problems in the past, the company looks poised for growth again. O'Brien also noted that weak volumes in parts of the Specialty Ingredients business have returned to normal levels in January. I'd expect a better report next time quarter as the problems look temporary, and Ashland has a consistent record of topping earnings estimates.
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The article Why Ashland Shares Slipped originally appeared on Fool.com.
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