New York - Arabstoday
Huntsman Corporation shares lost nearly a third of their value after the chemical maker’s second-quarter profit missed Wall Street’s expectations because of higher supply costs.The results confirmed what many chemical investors have feared for the past year: rising costs for crude oil and other feedstocks cannot be passed on to customers indefinitely. Chief Executive Peter Huntsman, brother of US presidential candidate Jon Huntsman, said the stock drop caught him off guard.“Frankly, I’m very surprised,” Huntsman told Reuters. “I think that we had one of the strongest quarters in the history of our business.”Huntsman’s larger rivals Dow Chemical and DuPont for the most part were able to pass higher costs to their customers given their scale, though analysts were skeptical that the trend will continue. Huntsman’s cost of goods sold rose 24 per cent from a year earlier to $2.43 billion in the second quarter.While the company was able to boost prices for titanium dioxide, a key paint pigment, and chemicals used to make pesticides and cosmetics, price increases eroded demand for Spandex and other textile products. The company said results will turn around.“This is going to be one of the strongest years, if not the best year, we’ve had in our history,” Huntsman said. Analysts lashed out at the company’s results.Huntsman’s earnings missed expectations because of “multiple missteps,” said Jefferies & Co analyst Laurence Alexander.Jeff Zekauskas, a JPMorgan analyst, was bothered because the company reported results only 90 minutes before the conference call, leaving him little time to wade through unusually complex financial tables. From / Gulf Today