W.R. Grace & Co., which filed for bankruptcy protection in April to shield itself from asbestos-related claims, reported yesterday that third-quarter operating profit inched upward 1.5 percent, driven by higher sales of chemicals.
The Columbia maker of chemicals used in oil refining and construction said income from core operations totaled $53.8 million in the quarter that ended Sept. 30, compared with $53 million in the corresponding period a year earlier.
Sales rose 7.8 percent in the quarter to $448.1 million, from $415.7 million a year earlier.
Grace's net income, however, fell nearly 42 percent in the quarter to $19.8 million, or 30 cents per diluted share, compared with $34.1 million, or 51 cents per diluted share, a year earlier.
Profit slipped partly because of a $4.8 million payment for Chapter 11 costs and a $5.8 million charge to clean up contaminated properties.
The company also said that a "poor business climate, particularly in September," and a strong U.S. dollar dampened operating results.
In the wake of the Sept. 11 terrorist attacks, "business just shut down across the board," said Robert M. Tarola, Grace's chief financial officer. "We probably lost a week of business.'
But Tarola said, "We thought it was a good quarter despite what turned out to be a very difficult environment as we got into September."
Tarola said that chemicals sales beat company targets. The sales were fueled in part by acquisitions that Grace made over the last 12 months.
During the first nine months of the year, Grace's income from core operations slipped 7.4 percent to $140.3 million. Net income totaled $57.4 million, down 38.2 percent.
"In general, the businesses they are in are doing pretty well," said Omar Jama, an analyst at Fitch Inc. in Chicago. Jama had not seen Grace's third-quarter results, which were released after the market closed.
"Compared to last year, their profitability may have slipped a little bit, but not a huge amount. Operations wise, they are still performing very well."
Shares of Grace rose 16 cents yesterday to close at $1.54, and are up 14 percent in the past five trading days.