Union Carbide Reports Decline In Earnings

DANBURY (AP) — Union Carbide Corp. reported a sharp decline in third-quarter earnings Monday, citing higher costs for energy and raw materials.

Net income fell 62 percent to $29 million, or 22 cents per share, compared with $77 million, or 36 cents per share in the same quarter last year before a gain of 21 cents per share from a litigation settlement.

Union Carbide Chairman William H. Joyce said the chemical company’s earnings were also hurt by lower average selling prices for polyethylene and ethylene glycol.

Earlier this month the company warned that it expected lower earnings of about 20 cents per share. Before the warning, analysts surveyed by First Call/Thomson Financial had estimated the company’s per-share earnings would be flat with last year at 36 cents per share.

Sales increased 9 percent to $1.64 billion, up from $1.50 billion a year ago.

Mr Joyce said that the third quarter was among the most difficult in years because raw material and energy costs rose rapidly while the strong US dollar hurt earnings from overseas sales.

Mr Joyce said the company has intensified efforts to control fixed costs and capital expenditures.

For the first nine months of the year, net income grew 18 percent to $256 million, or $1.86 per share, compared to $217 million, or $1.59 per share, in the same period last year before the effect of an accounting change of $20 million, or 14 cents per share.

Net sales for the first nine months of the year increased 14 percent to $4.93 billion, up from $4.32 billion in the same period a year ago.

A lengthy federal regulatory process has delayed Dow Chemical Co.’s planned $9.3 billion takeover of Union Carbide.

The merger, announced in August 1999, would create the second-largest chemical company in the United States behind DuPont.

The merger was expected to be completed earlier this year, but the approval process by the Federal Trade Commission has delayed final action.