Roughly two-thirds of that came from Lubrizols Lubricant Additives division, where revenues reached $627.5 million for the quarter, or 22 percent higher than the year before. The segments operating income reached $74.4 million, a gain of 10 percent over a year ago.
While earnings from continuing operations were positive overall and hit $47.1 million for the quarter, the bottom line was written in red ink. Discontinued operations represented a hit of $60.7 million, and higher raw material and utility costs, higher selling and administrative expenses, unfavorable currency, and restructuring charges resulted in an after-tax loss overall of $14.8 million for the quarter, versus a profit of $47.5 million in the first quarter of 2005.
Restructuring charges included the closure of a lubricant additives plant in Bromborough, U.K., announced a year ago.
Chairman, President and Chief Executive Officer James L. Hambrick observed that the Wickliffe, Ohio, based company has been battling headwinds from unfavorable crude and raw material and energy costs and currency. Still, he said, volumes were up most noticeably in our Asia Pacific and Latin American markets and reflect the concerted efforts we are making at organic growth in those markets.
We continued to address rising raw material and energy costs successfully with necessary and timely pricing actions, Hambrick said. During the quarter we were able to stop the margin erosion we had experienced over the last two years, and we were beginning to regain some ground. Recent increases in our raw material costs affected this progress, and the Lubricant Additives Segment quickly announced a global price increase, effective May 15.
In a conference call with analysts, Senior Vice President and Chief Financial Officer Charles Cooley commented on the Lubricant Additives segments performance in more detail. In North America, our largest region, volume increased 6 percent in the first quarter due to steady product demand and a favorable comparison to the weaker prior-year period, he said. Shipments in Europe increased 5 percent in the first quarter, and volume in the Asia Pacific/Middle East region increased 24 percent; sales volume in Latin America, Lubrizols smallest region, increased 14 percent.
Cooley also noted that the strong spot sales of lubricant additives seen during the previous three quarters do not seem to be a factor any longer, and we believe that our industry is back to its pre-hurricane conditions. Lubrizol saw spot sales of additives spike in 2005 due to outages at plants operated by Chevron Oronite, a leading global competitor.
The company also pointed out that, as promised last July, it has succeeded now in divesting five non-core business segments which together had revenues of $500 million. On Monday, the largest of these sales was completed, netting $270 million in cash. An affiliate of Sun Capital Partners, based in Boca Raton, Fla., purchased the segment, which makes food ingredients and industrial specialties and previously was part of the Noveon Specialty Chemicals segment. The new owner has renamed the company Emerald Performance Materials, and plans to operate it as a stand-alone company with headquarters in northeast Ohio.
The sale of the final segment being divested, Pharmaceutical Actives & Intermediates, is expected to close in the second quarter. Along with Februarys sale of the Telene resins business, these divestitures have netted a total of $320 million, Hambrick told analysts. He said Lubrizol will most likely use the proceeds to pay down debt – or to acquire bolt-on businesses if suitable ones can be found.