NEWTOWN SQUARE, Pa., July 17 /PRNewswire/ -- ARCO Chemical Company
(NYSE: RCM) reported second quarter net income of $110 million, or $1.13 per
share, compared with $92 million in first quarter 1998 and $35 million in
second quarter 1997. Higher second quarter net income versus first quarter
was largely driven by higher propylene oxide sales and MTBE margins, lower
propylene costs, and certain favorable balance sheet adjustments. These
benefits were partly offset by a $13 million increase in turnaround costs as
well as lower TDI profitability. Net income for the first six months of 1998
was $202 million, or $2.07 per share compared with $83 million in 1997.
ARCO Chemical President and Chief Executive Officer, Marvin O. Schlanger,
said, "These strong results reflect the success of our strategy in building
our core businesses and the outstanding contributions of our talented and
dedicated employees."
Comparing second quarter 1998 results with the same period last year, net
income increased by $75 million, or $0.77 per share, primarily due to stronger
core product volumes, lower raw material and turnaround costs, plus lower
costs due to the Company's cost reduction program.
ARCO Chemical Company previously announced that the boards of directors of
ARCO Chemical and Lyondell Petrochemical Company (NYSE: LYO) have approved an
agreement under which ARCO Chemical will be acquired by Lyondell through an
all cash tender offer of $57.75 per share for all the outstanding shares of
ARCO Chemical stock. The tender offer expires July 22, 1998.
ARCO Chemical Company is a leading worldwide manufacturer and marketer
of propylene oxide and derivatives and other intermediate chemicals. Its
products are used in a wide range of consumer and industrial goods, including
automotive components, cushioning, paints and coatings, plastics, home
furnishings, engine coolants and reformulated gasoline.
Except for historical facts, the matters discussed in this press release
concerning the company's outlook and business plans are forward-looking
statements. Since these statements are based on certain assumptions and
involve risks and uncertainties, they are subject to change at any time.
Actual results could differ materially from expected results based on numerous
factors, including the level of product demand, the cost and availability of
raw materials, changes in the competitive environment, the achievement of cost
reductions and efficiencies, the timing and scope of technological advances,
the company's ability to complete construction projects on schedule, the
overall condition of the chemical industry and other risks detailed from time
to time in the company's filings with the Securities and Exchange Commission,
including the company's Report on Form 10-Q for the quarterly period ended
June 30, 1997.
Visit the new Press Room on ARCO Chemical's website at
http://www.arcochem-news.com where you'll find the company's press releases,
company facts and figures, photo images, and more. To receive a press release
by fax, call 800-758-5804; use code #062063 (US only).
ARCO CHEMICAL COMPANY
Selected Financial Data
(Millions of Dollars, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
(Unaudited)
1998 1997 1998 1997
Sales and other
operating revenues $882 $956 $1,816 $1,985
Costs and other
operating expenses 650 795 1,370 1,639
Gross profit 232 161 446 346
Selling, general and
administrative expenses 70 67 122 135
Research and development 17 20 34 41
Restructuring charge
reversal (20) -- (20) --
Operating income 165 74 310 170
Interest expense 18 20 36 42
Other (income)
expense, net (A) (7) 1 (15) 2
Income before income
taxes 154 53 289 126
Provision for income
taxes 44 18 87 43
NET INCOME $110 $35 $202 $83
Earnings per share:
Basic $1.13 $.36 $2.08 $.86
Diluted 1.13 .36 2.07 .86
(A) Includes foreign exchange gains and losses, interest income, and
results from equity investments.
Depreciation/amortization expense for the six months ended 6/30/98 and
6/30/97 was $105 million and $116 million, respectively.
ARCO CHEMICAL COMPANY
SALES VOLUME STATISTICS
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
Core Products (a)
(mm lbs.) 1,040 974 2,111 1,976
Co-products:
TBA and Derivatives 244 260 494 520
(mm gals.)
SM and Derivatives 696 627 1,395 1,335
(mm lbs.)
(a) Core products include PO, PO derivatives, TDI and ADI.
SOURCE ARCO Chemical Company
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Related links:
http://www.arcochem-news.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 062063
CONTACT:
Sallie D. Anderson, Media Relations,
610-359-5773, or Sami Ahmad, Investor Relations, 610-359-3171,
both of ARCO Chemical
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