OM Group reports third-quarter revenue and earnings growth
November 10, 2010
OM Group, Inc. headquartered in Cleveland, Ohio, USA, recently announced financial results for the third quarter 2010.
The group operates manufacturing facilities in the Americas, Europe, Asia and Africa and serves a wide variety of sectors, including rechargeable batteries, electronic devices, cutting tools, electronics manufacturing, industrial coatings, defence, aerospace, and medical devices.
Net sales increased 26% to $297.2 million on a year-over-year comparison, due to the Battery Technologies acquisition, higher selling prices, mix and cobalt volume in Advanced Materials and volume growth in Specialty Chemicals. Net income was $24.2 million, compared with $11.4 million, during the third quarter of 2009.
“Our third-quarter results demonstrate the positive organic growth in both sales and earnings we can harness from favourable end market trends,” said Joseph M. Scaminace, chairman and chief executive officer. “This organic growth, combined with the solid financial contributions of our acquired Battery Technologies business and our ability to continue to control costs has allowed us to continue to generate profitable growth for our shareholders. Furthermore, by maintaining our balance sheet strength, we ensure we have the financial flexibility needed to fund our strategic expansion and enhance our long-term value creation.”
Gross profit and operating profit grew 74% and 243%, respectively. Improvement was driven by positive price and mix and cobalt volumes in Advanced Materials, volume growth in Specialty Chemicals, the acquisition in Battery Technologies and lower restructuring expense in Specialty Chemicals. Partially offsetting these were lower price and mix in Specialty Chemicals and higher manufacturing and distribution expense in Advanced Materials. As a percent of sales, gross profit and operating profit improved to 25% and 11.7%, respectively.
Growth in Powder Metallurgy business
The groups ‘Advanced Materials’ division saw net sales at $148.5 million, up 17% on third quarter 2009 sales. Excluding metal resale and by-product sales, product volumes were flat as growth in powder metallurgy, ceramics and chemicals was offset by slight decreases in battery materials. Operating profit in this division was $28.3 million (19.1% of sales), up 77% on third quarter 2009.
“We have seen growth across nearly all our end markets through the first nine months of 2010 as we have benefited from the global economic recovery,” commented Scaminace. “Although we anticipate markets will follow typical seasonal trends during the fourth quarter, we expect continued growth across our portfolio of businesses in 2011. This is based on our view that long-term demand trends are favourable across the end markets we serve, particularly within our growth platforms of portable power and electronic chemicals. We also expect to benefit from organic growth from market share gains and new product introductions.”
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