Lubrizol Corp. said last week that its third quarter earnings jumped 60 percent from the same period a year earlier, thanks to increased sales and the benefits of a weaker dollar. But the Wickliffe, Ohio, additive maker also warned that profits will probably fall next year, partly because it has lost a customer because of a recent merger.
Consolidated earnings for the period ended Sept. 30 were $36.5 million, or 71 cents per share, up from $22.8 million and 45 cents per share during the third quarter of 2001. Consolidated revenues grew to $510.3 million from $462.4 million. Shipment volumes increased a total 13 percent: 10 percent was due to acquisitions, 3 percent due to internal growth.
The companys Fluid Technologies for Transportation segment contributed revenues of $401 million – up 5 percent due to higher shipment volumes in North America and Europe. Revenues for the Fluid Technologies for Industry segment leapt 36 percent to $102 million; about two-thirds of that growth was due to acquisitions and the rest to internal growth.
Lubrizol Chairman, President and Chief Executive Officer W.G. Bares called the results outstanding and predicted fourth-quarter earnings of 45 to 49 cents per share. The company earned 41 cents per share in the fourth quarter of 2001
At the same time, Bares said that Lubrizol expects 2003 earnings to slide between 5 percent and 10 percent from this year. Management believes growth in the transportation segment has been higher than normal and will not likely be repeated next year. He also noted that the company lost a customer that was involved in a recent oil industry merger.
It is our understanding that our technology and service continue to be highly regarded by this customer and were not factors in this decision, he said. However, as we have commented over the last several years, consolidations among our oil company customers have been major risk factors for our FTT business.