Paint thickener and paper chemicals maker Hercules Inc. on Monday reported a 48 percent gain in second-quarter earnings, as income linked to a discontinued business buoyed results.
Net income rose to $61 million, or 54 cents per share, for the three months ended June 30 from $41.3 million, or 36 cents per share, during the year-ago period.
The results included $25.9 million related to the favorable resolution of a tax indemnification for a divested business.
Earnings from continuing operations slid to $35.1 million, or 31 cents per share, from $41.3 million, or 36 cents per share, a year earlier.
Sales grew 12 percent to $612.6 million from $549 million last year, including increases of 7 percent in North America, 20 percent in Latin America, 14 percent in Europe and 17 percent in Asia, the company said.
Analysts polled by Thomson Financial, on average, forecast 43 cents per share on revenue of $600.8 million.
Earlier this month, Ashland Inc. announced plans to acquire Hercules in a $2.6 billion cash-and-stock deal. The transaction is expected to close by the end of 2008.
Looking ahead, Hercules said the recovery of cost increases through pricing continues to improve. The company expects prices to offset most of the roughly $100 million in 2008 raw material, freight and utility annual cost increases.
It also said it expects modest operating margin improvement through higher use of recent capacity expansions and the impact of new product introductions.
Shares of Hercules fell 5 cents to $19.95 in after-hours trading.
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