COVINGTON, Ky., April 2 /PRNewswire-FirstCall/ -- Ashland Inc. (NYSE:
ASH) today announced guidance for its fiscal second quarter, ended March
31, 2007. Results for the quarter will include a $15 million after-tax
charge, as previously disclosed, for a voluntary severance offer (VSO)
extended to employees late last year, which will eliminate approximately
100 positions in various corporate functions. Ashland also will record $18
million of after-tax income from discontinued operations, reflecting the
improved credit quality of its insurance receivable from Equitas Ltd.,
following Equitas' transaction with Berkshire Hathaway. London-based
Equitas provides a significant portion of Ashland's coverage for asbestos
claims.
Excluding the above items, Ashland expects to report operating income
of $57 million to $65 million for the March 2007 quarter. Results will be
driven primarily by significantly better earnings from Valvoline and
Ashland Water Technologies, but will be tempered by results from Ashland
Performance Materials and Ashland Distribution. By comparison, Ashland's
operating income in the prior-year quarter was $49 million and $58 million
in the December 2006 quarter.
Valvoline's operating income should moderately exceed the $18.2 million
it earned for the December 2006 quarter. Water Technologies is expected to
achieve second-quarter operating income above the $5.4 million it produced
in the December quarter. It continues to benefit from improved performances
in its marine and industrial businesses and the earnings contribution of
the Environmental and Process Solutions business acquired last May.
Performance Materials expects operating income to be between $20 million
and $23 million, which is below the prior quarter's $25.6 million. The
decline in income is primarily due to inventory adjustments and increased
reserves for accounts receivable. Additionally, the business has
experienced some margin compression reflecting continued weakness in its
key North American automotive and residential housing markets. Ashland
Distribution's operating income should significantly exceed the $14.0
million earned in the December 2006 quarter; however, results will also
likely be significantly below the record $30.4 million earned in the March
2006 quarter. Unallocated and other costs, excluding the VSO, are expected
to be in the range of $7 million to $10 million.
Ashland will announce preliminary* results for the second quarter on
April 25, 2007, prior to the opening of the New York Stock Exchange, and
will follow with an 8:30 a.m., EDT, conference call and webcast.
Ashland Inc. (NYSE: ASH), a diversified, global chemical company,
provides quality products, services and solutions to customers in more than
100 countries. A FORTUNE 500 company, it operates through four divisions:
Ashland Performance Materials, Ashland Distribution, Valvoline and Ashland
Water Technologies. To learn more about Ashland, visit
http://www.ashland.com .
FORTUNE 500 is a registered trademark of Time Inc.
* Preliminary Results
Financial results are preliminary until Ashland's quarterly report on
Form 10-Q is filed with the U.S. Securities and Exchange Commission.
Forward-Looking Statements
This news release contains forward-looking statements, within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, with respect to Ashland's operating
performance. These estimates are based upon a number of assumptions,
including those mentioned within this news release. Such estimates are also
based upon internal forecasts and analyses of current and future market
conditions and trends, management plans and strategies, weather, operating
efficiencies and economic conditions, such as prices, supply and demand,
cost of raw materials, and legal proceedings and claims (including
environmental and asbestos matters). Although Ashland believes its
expectations are based on reasonable assumptions, it cannot assure the
expectations reflected herein will be achieved. This forward-looking
information may prove to be inaccurate and actual results may differ
significantly from those anticipated if one or more of the underlying
assumptions or expectations proves to be inaccurate or is unrealized or if
other unexpected conditions or events occur. Other factors and risks
affecting Ashland are contained in Ashland's Form 10-K for the fiscal year
ended Sept. 30, 2006. Ashland undertakes no obligation to subsequently
update or revise the forward-looking statements made in this news release
to reflect events or circumstances after the date of this release.
SOURCE Ashland Inc.
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http://www.ashland.com/
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CONTACT:
Media Relations, Jim Vitak, +1-614-790-3715,
jevitak@ashland.com , or Investor Relations, Dean Doza,
+1-859-815-4454, lddoza@ashland.com , both of Ashland Inc.
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