Cleveland, OH, U.S.-based Ferro Corporation announced on Monday that it expects first quarter 2003 revenue and earnings to improve significantly compared with first quarter 2002.
Ferro anticipates fully diluted earnings per share from continuing operations to be between U.S. $0.22 and $0.24, compared with $0.14 per share in the first quarter 2002. Income from continuing operations is expected to increase more than 90 percent. The first quarter 2003 estimate excludes pre-tax charges of $0.8 million related primarily to severance and integration costs. The first quarter 2002 is adjusted for similar pre-tax charges that approximate $1.1 million.
Revenue from continuing operations is expected to increase approximately 10 percent for the company overall, led by volume increases for Electronics, Color and Glass Performance Materials, Specialty Plastics, and Pharmaceuticals. The company also benefited from a stronger Euro compared with the first quarter 2002.
Earnings for the Coatings segment are expected to show significant improvement due to increased volumes and cost savings related to the integration of the dmc2 businesses, acquired in September 2001. The Performance Chemicals segment earnings are expected to be slightly less than the year ago quarter as increased volumes and higher prices were offset by rising raw material costs.
"The first quarter 2003 will mark the fourth consecutive quarter of earnings growth compared with prior year periods," said Hector R. Ortino, Ferro chairman and chief executive. "Most of our key end markets improved after a very soft fourth quarter 2002, but our visibility remains limited. I am encouraged that our Electronic Materials business, which has been hit the hardest during the recent recession, rebounded to show significant improvement compared with the prior year period. The overall economic environment has improved, but the rate of recovery and sustainability is still subject to improving global economic conditions, which is being challenged by the war in Iraq."
"Despite these challenging conditions, we remain confident we will experience significant earnings growth in 2003 due to an improved cost structure and the full year impact of the actions taken during 2002 to further integrate the dmc2 business," he added. "Until we are certain a sustainable recovery is underway, we will remain conservative in our management of working capital, discretionary spending and debt reduction."
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