Nalco 3Q Profit Jumps 76 Percent
NAPERVILLE, Ill. — Nalco Holding Co., whose chemicals are used in water treatment and industrial processes, said Tuesday its third-quarter profit grew 76 percent, aided by product price increases.
Quarterly net earnings increased to $30.7 million, or 21 cents per share, from $17.4 million, or 12 cents per share. Excluding special items, Nalco said it earned 27 cents per share in this year's quarter, beating Wall Street's expectations of 21 cents, according to an analyst poll by Thomson Financial.
Sales during the quarter rose to $915.4 million from $834.9 million, topping analysts' projections of $901.6 million.
In a statement, Chairman and Chief Executive William H. Joyce said he expects the price hikes to fully catch up with Nalco's own cost increases by the end of the year. But he said he is disappointed with the results of some of Nalco's major cost reduction programs, highlighting a European customer service center and efforts to improve the company's order entry process.
"Both of these projects continue to look very attractive and are expected to deliver the savings we originally forecast. However, the time to implement these projects has run longer than our expectations," he said.
Looking ahead, Nalco said it expects full-year profit of about 65 cents per share, after deducting about 5 cents for business process optimization charges. In August, the company had forecast full-year earnings of 67 cents per share less the impacts of business process optimization charges.
Nalco said lower taxes will offset higher-than-seen costs.
Wall Street had been looking for 69 cents, excluding special items.
Nalco shares rose 2 cents to close at $20.23 on the New York Stock Exchange.