A. Schulman Profit Rises on Citadel Acquisition

Plastic manufacturer A. Schulman Inc. reported higher fourth-quarter profit, bolstered by its recent acquisition of HGGC Citadel Plastics Holdings, but the company warned that continued market volatility would still weigh on results.

For the current year that ends in August, Schulman projects profit of $2.80 to $2.85 a share, compared with the $2.97 a share projected by analysts.

Shares, down nearly 9% this year, fell 0.24% to $36.95 in late trading.

The Ohio company had reported two consecutive quarters of losses, as results were battered by a stronger U.S. dollar. Though based in the U.S., Schulman does most of its business abroad and has been hit hard by falling demand in Europe.

In the latest period, currency conversions lowered revenue by about $79.8 million, Schulman said.

Overall, for the quarter ended Aug. 31, Schulman reported a profit before convertible special dividends of $23.7 million, or 75 cents a share, compared with $15.2 million, or 51 cents, a year earlier. Excluding restructuring- and acquisition-related costs and other items, profit fell to 64 cents from 66 cents a share a year earlier.

Revenue rose 7% to $674 million, as Citadel's acquisition added about $128.5 million, Schulman said.

Analysts had projected a profit of 64 cents a share on $685.8 million in revenue, according to Thomson Reuters.

In the latest period, revenue from Europe, the Middle East and Africa fell 16% to $326.7 million, with currency conversion lowering revenue by $64.1 million. Sales in U.S. and Canada, meanwhile, jumped 41% to $195.3 million, largely due to the Citadel acquisition.

On Tuesday, Schulman said that as part of its Citadel integration, it planned to consolidate its U.S. and Canada production facilities, resulting in the elimination of 26 positions and three plants closing in Evansville, Ind. Engineered plastics' production will move from Akron, Ohio, to one of its locations in Evansville, Schulman said, adding the Akron plant will focus on its Masterbatch product line.

Write to Maria Armental at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 20, 2015 19:25 ET (23:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.