OK, now I get it. Rohm & Haas
Since the company preannounced guidance, there were few surprises in the earnings report itself. Revenue was up 3%, but gross margins expanded a full point, and operating margins expanded even more. That drove better-than-13% growth in operating income, while lower interest expenses, taxes, and unusual expenses drove a 30% improvement in reported net income.
There are a lot of moving parts here, so I won't be talking about all of them. Instead, I'll focus mostly on the monomers and electronic-materials businesses. The monomers business seems to have some folks worried these days -- mostly of the threat of added capacity in the acrylic/acrylate markets. And it's true that revenue was down a little this quarter. But here's the thing -- the majority of sales in this business go to other Rohm and Haas units, so lower prices here just mean better margins in businesses like coatings and performance chemicals.
Electronic materials are unquestionably strong. Revenue was up 24%, and reported earnings doubled on strength in both semiconductors and packaging/finishing technologies. And while this business is obviously sensitive to changing technologies, Rohm and Haas has kept pace with the likes of Cabot Microelectronics
There's no shortage of stock ideas playing into the chemicals industry -- whether you're talking broadly diversified companies like DuPont
For more chemical-loaded Foolishness:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
