Business
Chemical earnings manage 3% gain in 1980 Unexpected 17% increase in fourth-quarter profits helped offset midyear doldrums; oil and diversified companies' performance still sluggish William J. Storck and William F. Fallwell C&EN, New York
The fourth quarter, which was to be a time for chemical companies to stem the earnings decline that had started in the second quarter of 1980, turned out a lot better than expected. Granted, performance among the oil and the diversified companies was nothing great. Some of the oil companies' earnings declined, and for the
rest, the earnings growth slowed from what it had been. Among diversified firms, earnings for most increased, but few in this group were boasting. Only among the chemical companies—and several chemical operations in the diversifieds—was there any surprise. Instead of sitting back in the fourth quarter, 32 of the 40 largest chemical companies (the other 8 had not reported at press time) got back into an improved profits picture, chalking up an average 17.2% increase over the fourth quarter of 1979. There was actually a wide range of results, with eight of the 32 companies reporting earnings in the fourth quarter lower than a year ago. This, however, was more than made up by stellar performances at other companies with earnings gains as high as 281%. As in the past few years, the smaller, more specialized chemical companies led the gain. Earnings at
the largest 20 chemical companies increased an average of 14.2% in the fourth quarter over a year ago. At 12 smaller companies, earnings jumped 40.2%. Sales at the 20 largest companies paced the survey, increasing 11.8% in the fourth quarter, whereas at the smaller companies, sales climbed 18.2%. Overall, for the 32 companies, sales increased 12.3% over fourthquarter 1979. The faster runup in fourth-quarter earnings than in sales naturally led to increased profit margins for the group. For the 32 companies, profit margins in the fourth quarter increased to 5.9% from 5.7% in 1979. Once again, the smaller companies outperformed the larger group. For the 12 smaller companies, profit margins in the fourth quarter increased to 10% from just 8% a year ago. Profit margins for the 20 larger companies increased only moderate-
Chemical industry leaders for fourth-quarter 1980 . . . Earnings 8
Sales Rank
$ Millions
Rank 1979
1 2 3 4 5 6 7 8 9 10
$3502.6 2772.3 2671.9 1708.8 1664.6 1447.9 917.7 913.0 848.1 842.0
1 2 3 5 4 6 7 8 10 9
Du Pont Dow Chemical Union Carbide W. R. Grace Monsanto Allied Chemical American Cyanamid Celanese Diamond Shamrock PPG Industries
Du Pont Dow Chemical Union Carbide Allied Chemical Texasgulf W. R. Grace PPG Industries American Cyanamid International Minerals Diamond Shamrock
$ Millions
Rank 1979
$206.2 191.2 175.5 95.8 80.9 67.4 67.0 48.4 46.3 45.9
1 2 3 4 9 5 7 8 10 6
Profitability Earnings as % of sales
Texasgulf Freeport Minerals Nalco Chemical International Flavors Petrolite International Minerals Air Products First Mississippi Mallinckrodt Loctite
28.5% 21.5 12.4 11.0 9.2 9.0 8.8 8.5 8.5 8.1
Rank 1979
2 1 5 4 7 12 11 7 9 3
. . . and for the full year 1980 I
Sales Rank
1 2 3 4 5 6 7 8 9 10
Earnings 8 $ Millions
Du Pont $13,652.5 Dow Chemical 10,625.8 Union Carbide 9,992.1 Monsanto 6,574.4 W. R. Grace 6,101.3 Allied Chemical 5,518.5 American Cyanamid 3,453.9 Celanese 3,348.0 PPG Industries 3,200.0 Diamond Shamrock 3,145.7
Rank 1979
1 2 3 4 5 6 7 8 9 10
Rank $ Millions J 979
Dow Chemical Du Pont Union Carbide Texasgulf Allied Chemical W. R. Grace Monsanto PPG Industries Diamond Shamrock International Minerals
a After taxes. Note: For 40 chemical companies listed on page 10.
8
C&EN Feb. 16, 1981
$753.4 716.3 699.1 325.6 303.3 283.8 255.4 209.2 201.2 173.5
2 1 3 13 8 5 4 6 7 12
Profitability Earnings as % of sales
Texasgulf Freeport Minerals International Flavors Nalco Chemical Petrolite International Minerals First Mississippi Loctite Mallinckrodt Air Products
30.0% 22.9 14.1 11.7 9.8 9.0 8.7 8.4 8.2 7.9
Rank 1979
2 1 3 5 9 7 14 4 10 8
I
Chemical industry 1980 fourth-quarter results Sales
Earnings
% change from year-earlier quarter 40 I "
% change from year-earlier quarter 40 | l i |
•Sales gains rose to 12%
" ; "IÎ
