Chemical maker W.R. Grace hosted its first earnings conference call with analysts in nine years Thursday as it prepares to emerge from Chapter 11 bankruptcy.
Executives described a strong performance in new markets, such as Asia and the Middle East, and a weaker showing in North America and Europe, which the company said would lead to an unspecified number of job cuts.
The Columbia-based company, which filed for bankruptcy in 2001 because of asbestos-related lawsuits, has been slowly ramping up activities normal for a public company. In the third quarter of last year it began holding investor meetings and doing road shows.
The company had initially hoped to have the first earnings call after emerging from bankruptcy, but it is still waiting for a judge's approval of its reorganization plan. Before, Grace had anticipated emerging late in the second quarter or during the third quarter of this year.
"A year ago, we started thinking about how we could really actively re-engage our investors," Hudson LaForce, the company's chief financial officer, said in a phone interview. "At the time, our thinking was emergence from bankruptcy is a great event to do this. What has happened is the exit has been delayed and what we've said is we need to be doing [earnings calls] anyway, whether we're out of bankruptcy or in bankruptcy."
It is unclear when the judge will make a decision about the reorganization plan.
"She has not said anything about where she is in her process and when we might be able to expect an order," LaForce said. "The good thing about Grace right now is our business performs very well whether we're in bankruptcy or not. From a business perspective, we're going to be doing the exact same things."
The earnings call was typical of most corporate calls.
Grace executives reported second-quarter earnings of $51 million, or 69 cents per share, for the period ended June 30. That was compared with $19.3 million, or 26 cents a share, for the same period a year ago.
Revenue declined 3.7 percent, to $685 million, compared with $711 million for the same period a year ago. The decline was mostly because of the deconsolidation of a joint venture that no longer contributes to the company's sales.
The company's earnings were helped by cost cuts and strong performance in emerging markets such as Asia, where sales in the construction division increased 20.5 percent.
It was a different story in North America and Europe, where sales were lower than normal because of weak customer demand and a decline in the value of the euro, the company said. Grace said it has put in place a restructuring program in these markets that will be achieved mostly through job cuts.
Most of the jobs will be eliminated at the company's offices in Cambridge, Mass., where the construction division is based. The company declined to say how many positions would be eliminated.
The company is continuing its expansion in emerging markets, this week having opened a plant in Saudi Arabia that makes chemicals used in construction materials such as cement. It will open four more facilities in areas that could include Latin America, Asia and the Middle East.
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