As part of a company-wide overhaul, Schulman (NASDAQ:SHLM) reported Monday stronger-than-expected fourth-quarter earnings from a year-ago loss, driven largely by its April acquisition of ICO.
The Akron, Ohio-based company posted net income of $7.8 million, or 25 cents a share, compared with a loss of $7.89 million, or 31 cents a share, in the same quarter last year.
Excluding one-time items, earnings for the period ended Aug. 31 were 37 cents a share, ahead of average analyst estimates polled by Thomson Reuters of 30 cents.
Schulman CEO Joseph M. Gingo said the company was “pleased” with the strong earnings, attributing performance to the company’s “strong culture” of driving shareholder value through long-term profitability.
Revenue for the supplier of plastic compounds for the consumer products and packaging industries was $476.2 million, up from $320.6 million a year ago, but missing the Street’s view of $489.2 million.
Sales were driven by higher volumes, up 60% to 525 million pounds from a year ago, including 183 million pounds from ICO.
The company bought ICO for $191 million in an effort to expand its presence in the specialty powders markets. Also this year, Schulman paid just under $10 million for McCann Color, increasing capabilities in the North American masterbatch market.
Schulman is continuing an effort to overhaul its American businesses after lagging sales and volume pushed profits lower. While volume remained flat last quarter, the segment's operating income was $7 million, up from a year ago loss of $1.4 million. ICO accounted for $4 million of the profit.
Gingo, who called the future "uncertain" the company remains “optimistic” that the gradual recovery will continue. Schulman expects fiscal 2011 income to range between $57 million and $62 million.