NEWS OF THE WEEK BUSINESS
CHEMICAL EARNINGS Improvement is widespread, but DuPont's results roiled the stock market
T
HE FIRST BATCH OF S E O
ond-quarter earnings reports from major U.S. chemical companies confirms that industry growth, seen for more than a year, is continuing unabated. Of the 13 companies that have reported second-quarter earnings from continuing operations, excluding one-time items, only two, Engelhard and Sigma-Aldrich, had earnings increases of less than 10%. More important was the distribution of double-digit or better increases among the companies. Until late 2004, downstream specialties companies were having trouble overcoming escalation in raw material costs, which held down earnings growth. For the past couple of quarters, though, they seem to be catching up. For instance, Rohm and Haas posted a 51.7% second-quarter earnings increase to $179 million on an 11.4% rise in sales to $2.01 billion. The company's profit margin rose to 8.9% from just 6.6% in the second quarter of last year. CEO Raj L. Gupta says, "Our performance reflects the ongoing em-
earnings forecast for the year. The company's results translated to earnings of 90 cents per share, while analysts had expected 96 cents. As a result, at least two stock analysts—Donald D Carson at Merrill Lynch and FrankJ. Mitsch at Fulcrum Global Partners—cut their ratings on the company from buy to neutral. 'Although we believe that DuPont offers shareholders long-term val-
phasis on implementing price increases to recover extraordinarily high raw-material and energy costs, while mamtaining tight control over our expenses." Lubrizol had the largest SECOND-QUARTER RESULTS percentage increase in secMost chemical companies performed well ond-quarter earnings — SALES EARNINGS3 CHANGE FROM 2004 PROFIT MARGINb 105.8% to $63.8 million 2004 ($ MILLIONS) SALES EARNINGS 2005 on a 48.0% jump in sales 9.8% 16.9% 9.2% 8.6% Air Products $2,078.4 $190.6 to $1.07 billion. These 5.9 5.8 502.8 29.0 53.9 50.3 Albemarle comparisons, however, 10.2 75.4 6.8 16.3 Dow Chemical 11,450.0 1,172.0 include the results from 10.7 7,511.0 12.3 12.0 DuPont 904.0 -0.2 the company's acquisition 5.0 5.7 1,106.0 63.5 -0.2 5.5 Engelhard of Noveon for only one 3.1 4.2 387.9 44.6 H.B. Fuller 16.2 6.8 4.3 105.8 6.0 1,066.0 63.8 48.0 Lubrizol month of the correspon7.7 23.5 8.7 2,656.0 9.3 PPG Industries 231.0 ding 2004 quarter. 10.9 19.4 10.9 1,919.0 209.0 19.7 Praxair Upstream, industry 51.7 8.9 11.4 6.6 Rohm and Haas 2,007.0 179.0 leader D o w Chemical 4.9 444.0 27.4 17.1 14.1 Sigma Aldrich 62.5 continued its string of 278.4 1.6 2.2 62.6 Stepan 6.2 17.8 high quarterly growth 490.0 35.2 4.9 80.4 6.6 Terra Industries 32.3 rates with an earnings a After-tax earnings from continuing operations, excluding significant nonrecurring jump of 75.4% to $1.17 and extraordinary items, b After-tax earnings as a percentage of sales. billion on just a 16.3% sales increase to $11.5 billion. ue at current levels," Mitsch Number two DuPont providwrote, "the disappointing earned perhaps the biggest news ings along with the below-conamong chemical companies last sensus near-term outlook, with week when the firm reported that ancillary litigation issues hanging earnings rose just 12.3% to $904 overhead, will most likely restrain million on a 0.2% decline in sales the stock from outperforming to $7.51 billion, and it lowered its near term."-WILLI AM STORCK
MACROMOLECULAR
SCIENCE
Polymer Brushes Respond To Temperature
A
polymer brush material consisting of water-soluble and temperatureresponsive polyacrylamide bristles grafted onto an electrically conducting polythiophene backbone promises a wide range of applications, according to the chemists who synthesized it at Louisiana State University, Baton Rouge. The unique optical and electronic properties that result from combining the two polymers could find use in bioelectronics, biosensors, actuators, fluorescent thermometers, and supramolecutar
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materials, suggest chemistry professor Robin L. McCarley and coworkers [Angew. Chem. Int. Ed. 2005, 44, 4872). The team synthesized the material using atom transfer radical polymerization to grow poly(A/-isopropylacrylamide) chains on the 3-positions of polythiophene. "Growth of the polyacrylamide chains from each polythiophene repeat unit allows the synthesis of polythiophene with densely grafted polyacrylamide chains," McCarley says. "The material is exceedingly soluble in water, which bodes well
for green chemical approaches for applications of conducting polythiophenes, including spray coatings." The new material exhibits a reversible color change and becomes insoluble in water when the material is heated above a critical temperature (30-32 °C). The color of the material is related to the conjugation length of the polythiophene backbone. Below the critical temperature, the polyacrylamide side chains are fully hydrated, coiled, and extended. Above this temperature, the side chains are collapsed in a globular conformation that shortens the conjugation length of the polythiophene backbone.—MICHAEL FREEMANTLE
C & E N / AUGUST 1 , 2005
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