Second-quarter sales at Avient Corp. — formerly PolyOne — were hammered by the effects of COVID-19, but were slightly better than what company officials had expected.
The Avon Lake, Ohio-based materials firm saw second-quarter sales slide almost 19 percent to $609.1 million. Quarterly profit essentially was flat, down less than 1 percent to $23 million. Officials previously had said they expected sales for the quarter to be down 20 percent.
In a July 22 news release, Chairman, President and CEO Robert Patterson said that following the firm's update call with analysts on June 16th, Avient "experienced an uptick in orders in Asia which also led to better than expected margins in the color segment."
"Although the pandemic significantly impacted the Americas and Europe, sales in Asia increased 13 percent for the second quarter," he added.
Officials said that Avient is an essential supplier into many industries serving COVID-19 response and recovery, including food and beverage packaging and health care applications. Sales into these end markets increased 3 percent and 7 percent during the quarter. But these increases were more than offset by weak demand in the automotive sector (down almost 19 percent) and consumer discretionary sector (down 17 percent).
"Our recent efforts to expand our portfolio in less-cyclical, more specialty technologies have been a source of strength for us, as other markets have been significantly impacted by global lockdowns and stay-at-home orders," Patterson added.
Avient also had a big news day on July 1, when it closed its $1.4 billion purchase of the masterbatches business of Clariant AG and changed its name to Avient after 20 years as PolyOne.
"We are excited about this next step in our specialty journey," Patterson said. "Integration efforts are well underway, and I'm very pleased to see an immediate and high level of collaboration between our two organizations."
For the first half, Avient saw sales slide almost 12 percent to $1.32 billion, as first-half profit increased 23 percent to $56.1 million.
Among individual business units, Color, Additives & Inks fared best in the second quarter, with sales down 15 percent to $226.8 million. That unit's operating income for the quarter dropped almost 24 percent to $32.3 million.
Avient's Specialty Engineered Materials unit saw quarterly sales drop 19 percent to $158.8 million, with operating income tumbling 32 percent to $17 million.
The firm's Distribution unit had a rough sales quarter, dipping 22 percent to $238.8 million. Operating income for the unit dropped 27 percent to $14.6 million.
Wall Street reaction to Avient's earnings was mild July 22, with its per-share price up almost 2 percent to $26.13 on a day when major stock indices rose less than one percent. For the year, the firm's per-share stock price is down almost 30 percent.
Avient is one of North America's largest compounders and concentrate makers and as one of the region's largest resin distributors. The firm employs 9,100 worldwide and posted pro forma sales of $4 billion in 2019.