BUSINESS
CHEMICAL STOCKS WELL OVERALL Meanwhile, SHARES of drug firms rose modestly in the first quarter, and biotecn companies fell sligntly WILLIAM J. STORCK, C&EN NORTHEAST NEWS BUREAU
THE FIRST QUARTER of the newyear was good for chemical company stock prices, which once again outperformed not only shares of the pharmaceutical and biotechnology companies that C&EN sampled, but also the major stock market indexes such as the Dow Jones industrial average and the Standard & Poor's and NASDAQ indexes. By the end of March, C&EN's index of 25 chemical company stocks had grown 5.2% from the close of 2006, to 248.1 (all C&EN indexes are relative to 1992 = 100). C&EN's index of nine drug companies increased 3.0% to 405.3, while the 13-company biotechnology index fell 1.5% to 558.8. During the same period, the Dow Jones declined 0.9%, the S&P 500 increased 0.2%, and the NASDAQ was up 0.3%. It is somewhat surprising that chemicals held up so well, considering that on Feb. 27 the Dow Jones fell a steep 3.2% from the previous day and the S&P 500 dropped 3.5%. The chemical index declined a slightly greater 3.6% on that date, but it had built up enough prior momentum that it finished the quarter in better shape overall. The improvement in chemical stocks was widespread among the 25 companies, 20 of which showed increases in the quarter. The two strongest companies were fertilizer producers Mosaic and Terra Industries. Both benefited from forecasts by the Department of Agriculture and consultants that corn planting in 2007 would be up strongly because of greater demand for corn to make ethanol for C&EN chemical index, 1992 = 100 260 | High 240 220 200 180
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gasoline and higher prices for the grain. Terra's stock registered the strongest performance among the 25 firms, rising 46.1% to $17.50 per share. This rise followed a 58.4% increase for the firm in the
final quarter of last year over the previous quarter and a 113.9% surge in all of 2006 compared with 2005. Mosaic's stock showed the second largest quarterly growth, increasing 24.8% to $26.66 per share, continuing a trend seen in 2006. At the end of the fourth quarter last year, its stock price was 29.8% higher than it had been at the end of the previous three-month period and 46.0% higher than its 2005 closing price. The two largest chemical companies, Dow Chemical and DuPont, both showed increases in the quarter, but by very different percentages. Dow's stock price rose 14.8%, at least partly on rumors that a private equity company was going to buy the firm, to
CHEMICAL STOCKS Mosit companies showed higher values in this year's first quarter than in the previous quarter FIRST-QUARTER STOCK PRICE 3 LOW HIGH CLOSE
Air Products Albemarle Arch Chemicals Cabot Celanese
$78.37 43.05 34.49 48.30 31.27
$69.11 29.47 43.39 24.76
$73.96 41.34 31.22 47.73 30.84
12.19
CHANGE FROM FROM 2006 CLOSE
PRICE/ EARNINGS RATIOb
5.2% 15.2 -6.3 9.5 19.2
20.5 19.9 19.4 23.2 10.3
10.93 56.24 45.86 49.43 63.33
13.5 -0.5 14.8 1.5 6.8
28.8 16.3 10.8 17.2 12.7
Chemtura Cytec Industries Dow Chemical DuPont Eastman Chemical
47.08 53.14 64.66
9.45 53.83 39.39 48.05 57.90
Ferro FMC Corp. H.B. Fuller Georgia Gulf Hercules
22.69 79.31 29.45 21.54 21.11
20.15 71.27 24.11 16.21 18.48
21.61 75.43 27.27 16.21 19.54
4.4 -1.5 5.6 -16.1 1.2
48.0 13.8 18.3 7.0 15.9
Huntsman Corp. Lubrizol Mosaic Nalco Holding PPG Industries
21.59 53.90 28.00 24.80 72.29
18.81 49.07 19.76 20.30 64.30
19.09 51.53 26.66 23.90 70.31
0.6 2.8 24.8 16.8 9.5
13.1 16.7 74.1 28.5 13.6
Praxair Rohm and Haas Sigma-Aldrich Stepan Terra Industries
64.83 54.98 42.67 31.99 18.76
58.85 50.50 37.77 25.40 11.65
62.96 51.72 41,52 26.25 17.50
5.1 1.2 6.8 -17.1 46.1
21.0 14.8 20.3 41.7 def
255.6
232.5
248.1
5.2%
12786.6
12050.4
12354.4
-0.9%
1459.7
1374.1
1420.9
0.2%
'
C&EN chemical index0 (1992 = 100) Dow Jones industrial average Standard & Poor's 5 0 0 index
a Adjusted for stock splits b Calculated by using M
