FAIRLAWN, OHIO (Oct. 14, 2 p.m. ET) — A. Schulman Inc. today raised its earnings guidance for the fiscal year and boosted its dividend by 10 percent.
The Fairlawn-based compounder and resin distributor said that based on unaudited and preliminary results, it expects to report adjusted net income of about $58 million for its fiscal year ended Aug. 31. On Aug. 25, A. Schulman said it was likely to report between $50 million and $52 million of adjusted net income for the year.
The improvement in adjusted net income compared with earlier guidance “was driven primarily by unexpected strength in volume, improved margins and favorable tax adjustments that positively impacted fiscal 2011 fourth-quarter and full-year results,” A. Schulman said.
The company said “an unanticipated volume improvement” in its European distribution business occurred late in the fourth quarter. A. Schulman attributed that to “increased buying patterns by customers in anticipation of rising raw material prices.” The company also said it “experienced unanticipated general margin expansion across all of its businesses.”
Joseph Gingo, A. Schulman's chairman, president and CEO, said that despite the strong performance in fiscal 201l, he's taking a cautious approach to the new fiscal year.
“The lack of stability in global markets is making forward-looking projections into 2012 very difficult,” he said in a statement. “While this latest boost in margin will contribute to better results for the year, we are not convinced that this favorable trend is sustainable, given the current unpredictability of the global markets.”
Directors of A. Schulman also declared a regular quarterly cash dividend of 17 cents per common share, payable Nov. 1 to shareholders of record on Oct. 24.
The company said the dividend represents an increase of about 10 percent from the prior quarter's dividend of 15,5 cents per common share.