PolyOne reports third quarter profit

AVON LAKE, OHIO (Nov. 4, 10:55 a.m. ET) -- Less turned out to be more for PolyOne Corp. In the third quarter, as the compounder/distributor swung to a profit even as sales were down from the year-ago period.

Avon Lake-based PolyOne on Nov. 4 reported a third-quarter profit of $49.6 million, compared to a $5.6 million loss in the same quarter in 2008. Things were a bit different on the sales side, however, as third-quarter sales fell 25 percent to $548 million in the same comparison.

Chairman, President and CEO Stephen Newlin attributed the turnaround to the ability of gross margin expansion to offset the impact of volume declines. He also pointed out that the $19.5 million of operating income generated by the firm’s specialty platform in the third quarter was the highest amount posted by that unit in PolyOne’s 9-year history.

For the first nine months of 2009, PolyOne recorded a profit of almost $44 million even though sales fell 31 percent to $1.5 billion vs. the year-ago period. By comparison, PolyOne’s nine-month profit in 2008 was less than $10 million.

Seasonality in such markets as building and construction typically reduce PolyOne’s fourth-quarter revenue, and Newlin said that this year that trend "may be exacerbated by extended [customer] plant shutdowns toward the end of the year."

"That being said...we are cautiously optimistic about the direction of the global economy going into 2010," he added.

PolyOne ranks as North America’s largest compounder and as one of the region’s largest resin distributors. On Wall Street, PolyOne’s per-share stock price bottomed out under $1.50 in March, but was near $5.80 in early trading Nov. 4.

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