NEWS OF THE W EEK
EARNINGS ARE STILL GROWING CHEMICAL PROFITS: For most companies reporting, third-quarter results rise over last year’s
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James L. Hambrick says the firm enjoyed good sales growth in international markets that more than offset a weak North American market. Earnings at DuPont, the second-largest U.S. chemical company, grew 30.1% to $566.0 million on a 5.8% increase in sales to $6.7 billion. “We increased sales outside the U.S. 11% and grew worldwide agriculture and nutrition segment sales 21%,” says CEO Charles O. Holliday Jr. Dow Chemical, the U.S.’s largest chemical com-
HE JULY-THROUGH-SEPTEMBER period was
good to most chemical companies announcing third-quarter results. Of 15 firms that have reported, 10 showed double-digit percentage increases in earnings or better, and only two posted lower earnings compared with third-quarter 2006. Two industry sectors, fertilizers and industrial gases, showed good results for the quarter. The best performance came from fertilizers, where increases in demand lowered inventories and spurred higher prices. Mosaic, the larger of the two crop-nutrient producers that C&EN tracks, posted an earnings increase of 180.3% to $305.5 million on a 55.5% jump in sales to $2.0 billion. At Terra Industries, the other fertilizer company, earnings surged a whopping 674.8% to $79.8 million on a 27.7% sales growth to $593.7 million. A key factor, the company says, is a significant increase in U.S. corn acreage. The two industrial gas companies that reported, Air Products & Chemicals and Praxair, produced good results. Air Products’ earnings rose 25.2% to $262.2 million on an 11.5% increase in sales to $2.6 billion. The firm saw higher pricing and volumes in merchant gases and higher volumes in electronics, performance materials, and tonnage gases made at the customer’s site. At Praxair, earnings increased 23.5% to $305.0 million as the company’s sales improved 13.0% to $2.37 billion due, the company says, to better pricing and operational efficiencies. Other companies also experienced good growth in the quarter. Lubrizol’s earnings rose 40.3% to $72.8 million on a sales increase of 8.8% to $1.1 billion. CEO
THIRD-QUARTER RESULTS
Chemical companies continue earnings increases SALES EARNINGSa ($ MILLIONS)
Air Products Albemarle Cytec Industries Dow Chemical DuPont
CHANGE FROM 2006 SALES EARNINGS
11.5% -3.9 1.4 10.0 5.8
25.2% -2.6 20.2 -15.0 30.1
PROFIT MARGINb 2007 2006
$2,603.2 584.0 875.1 13,589.0 6,675.0
$262.2 59.1 51.1 807.7 566.0
10.1% 10.1 5.8 5.9 8.5
9.0% 10.0 4.9 7.7 6.9
Eastman Chemical Hercules Lubrizol Mosaic Nalco Holding
1,813.0 544.2 1,120.4 2,003.3 988.2
106.0 53.4 72.8 305.5 47.7
-7.8 6.1 8.8 55.5 8.0
2.9 30.6 40.3 180.3 22.0
5.8 9.8 6.5 15.2 4.8
5.2 8.0 5.0 8.5 4.3
PPG Industries Praxair Rohm and Haas Sigma-Aldrich Terra Industries
2,823.0 2,372.0 2,204.0 503.2 593.7
222.0 305.0 192.8 71.6 79.8
12.7 13.0 6.7 14.0 27.7
14.4 23.5 0.9 4.7 674.8
7.9 12.9 8.7 14.2 13.4
7.7 11.8 9.3 15.5 2.2
a After-tax earnings from continuing operations, excluding significant extraordinary and nonrecurring items. b After-tax earnings as a percentage of sales.
pany, is one of the two firms with lower earnings from continuing operations, excluding significant unusual items. Despite a 10.0% increase in sales to $13.6 billion in the quarter, the company’s earnings fell 15.0% to $807.7 million. The other firm reporting a decline is Albemarle, where earnings dropped 2.6% to $59.1 million on a 3.9% decrease in sales to $584.0 million.—WILLIAM STORCK
OBITUARY Nobel Laureate Arthur Kornberg dies at 89 Arthur Kornberg, professor emeritus of biochemistry at the Stanford University School of Medicine and winner of the 1959 Nobel Prize in Physiology or Medicine for his work on DNA replication, died of respiratory failure on Oct. 26. He was 89. Kornberg received a B.S. degree in chemistry and biology from the City College of New York in 1937. He earned an M.D. degree from the University of Rochester in 1941. At Stanford, Kornberg elucidated the
key steps in the pathways of pyrimidine and purine nucleotide synthesis, including the discovery of 5-phosphoribosyl 1-pyrophosphate (PRPP) as an intermediate. He was the first to isolate DNA polymerase and synthesize DNA in a test tube. Kornberg shared the Nobel Prize with the late Severo Ochoa of New York University, who synthesized RNA. Xiaobing Shi, a postdoctoral student in Kornberg’s lab in 2001–05, says Kornberg cared about his students every
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bit as much as he cared about science. Kornberg’s legacy also lives on with his three sons. Stanford structural biologist Roger D. Kornberg won the 2006 Nobel Prize in Chemistry for his studies on the molecular basis of eukaryotic transcription. Thomas Kornberg is professor and vice chair of biochemistry and biophysics at the University of California, San Francisco. And Kenneth Kornberg is an architect and founder of Kornberg Associates.—LINDA WANG
