OMNOVA Solutions Inc. (NYSE:OMN) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.
OMNOVA Solutions Inc. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share decreased 86.36% to $0.03 in the quarter versus EPS of $0.22 in the year-earlier quarter.
Revenue: Decreased 8.77% to $251.7 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: OMNOVA Solutions Inc. reported adjusted EPS income of $0.03 per share. By that measure, the company missed the mean analyst estimate of $0.08. It missed the average revenue estimate of $258.25 million.
Quoting Management: “As we expected, operating results in our first quarter of 2013, which has been historically our weakest on a seasonal basis, were lower than last year. These results are not reflective of what we anticipate for the rest of the year. As previously disclosed, we lost significant volume in our coated paper chemicals markets late last year, which negatively impacted results in the first quarter. However, we have won new commitments that are expected to offset much of the lost volume, with product shipments beginning to ramp up in the second quarter. Additionally, weak volumes in both the European and Indian markets negatively impacted results,” said Kevin McMullen, OMNOVA Solutions’ Chairman and Chief Executive Officer. “While we had a weak start to the quarter, we were encouraged by the profit trend as the quarter progressed, with February results significantly stronger than the prior two months.
“We have made a number of structural improvements that we expect will begin contributing to increased operating profit during the remainder of the year, including new global manufacturing capability coming online and the completion of the Columbus, Mississippi manufacturing consolidation. In addition, we have recent new business commitments from customers and are seeing encouraging signs from key end markets in which we are well positioned such as housing, oil and gas exploration, personal hygiene and transportation. As a result, we expect full-year 2013 Adjusted Income from Continuing Operations will exceed last year’s performance,” said McMullen.
Key Stats (on next page)…