The last couple of months have been a slippery slide down for the markets. The Dow (DIA) is down (-7.15%) from its 52-week high of 12,928 to its 12,004 close on June 17 with the S&P 500 (SPY) down (-7.23%) and the Nasdaq (QQQ) following suit down (-9.39%). Although, as investors, we do not wish for the markets to pull back quite this much, it does create excellent opportunities to pick up some great companies at discounted prices. I have compared the following industrial companies known to be at the top of their sector.
Albemarle Corp. (ALB) has a history that extends back to 1887. Today, Albemarle is a leading global producer of polymer solutions, fine chemistry and catalysts. Its products are used as additives or intermediates for a wide range of products manufactured by pharmaceutical companies, cleaning product manufacturers, water treatment companies, agricultural companies, electronics goods manufacturers, refineries and paper and photographic companies.
Albemarle reported first quarter 2011 earnings of $106.6 million, or $1.15 per share, compared with first quarter 2010 earnings of $63.3 million, or $.69 cents per share. The company reported net sales of $696.5 million in the first quarter of 2011 compared with net sales of $580.3 million in the first quarter of 2010.
Commenting on results, Mark C. Rohr, Chairman and CEO, stated, "I am extremely pleased with our performance this quarter as we achieved our highest quarterly earnings and EBITDA in the Company's history, as well as record income levels for all three of our operating segments. We continue to benefit from improving trends in the markets served by our businesses and our keen focus on cost control and cash generation. We expect the strength of our core technologies and key market insights to continue to drive solid earnings growth in 2011."
The Board of Directors of Albemarle declared a quarterly dividend of $.165 per share, payable July 1, 2011, to shareholders of record at the close of business as of June 15, 2011.
ALB's 52-week high was $71.79. It closed out last week at $64.70, down (-9.88%). Consensus for Albemarle’s growth is estimated to be up +25.30% for the year.
Balchem Corp. (BCPC) was founded in 1967 and is engaged in the development, manufacture and marketing of specialty performance ingredients and products for the food, feed and medical sterilization industries. BCPC has three segments: specialty products, encapsulated/nutritional products and the unencapsulated feed supplements segment.
Balchem reported record net sales of $73.0 million for the quarter ended March 31, 2011, as two of the business segments set new quarterly sales records. This is an increase of 21.9% above the $59.9 million result of the prior year comparative quarter. Correspondingly, record first quarter net earnings were achieved of $8.9 million, an increase of $1.9 million, or 26.8% compared with the same period last year. The $8.9 million generated diluted net earnings of $.30 per common share versus $0.24 per common share for the prior year comparable period, an increase of 25.0%.
Dino A. Rossi, Chairman, President and CEO of Balchem said, “This first quarter was a great start to 2011, as we continue to record very strong sales growth, particularly driven by 20% overall volume improvement from the first quarter of 2010. All three segments set new first quarter sales records, with ANH and FPN achieving new all-time record quarterly results. We continue to see strong global demand for our products and are leveraging off of our diverse production locations and strong supply chain logistics to maintain and grow our leadership positions. Our balance sheet continues to strengthen, further positioning us to capitalize on global strategic opportunities.”
BCPC's 52-week high was $43.20. It closed out last week at $39.88, down (-7.69%). Consensus for Balchem’s growth is estimated to be up +15.20% for the year.
Kronos Worldwide Inc. (KRO) was founded in 1989 and engages in the production and marketing of titanium dioxide pigments in North America and Europe. The titanium dioxide pigments are used to impart whiteness, brightness and opacity for products, such as coatings, plastics, papers, fibers, food, ceramics and cosmetics. The company produces titanium dioxide pigments in two crystalline forms, such as rutile and anatase under the Kronos brand name primarily serving paint, plastics and paper manufacturers. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc (VHI).
KRO reported net income for the first quarter of 2011 of $60.3 million, or $1.04 per diluted share, compared with net income of $42.8 million, or $.87 per diluted share, in the first quarter of 2010.
Steven L. Watson, Vice Chairman and CEO said, "Our segment profit in the first quarter of 2011 more than quadrupled from the first quarter of last year. Strong global demand for TiO2 products allowed us to successfully implement further increases in our TiO2 selling prices during the quarter. We have continued to operate our manufacturing facilities at near full practical capacity utilization levels and set several new internal production records during the first quarter. We believe the significant global shortage of TiO2 products will continue for several years, due to the constraints to adding significant new production capacity, especially for the premium grades of TiO2 products through the chloride process, and the growing worldwide demand for TiO2 products. As a result, we expect our cash flows and profitability to continue to increase beyond 2011."
Kronos announced that its board of directors declared a regular quarterly dividend of $.15 per post-stock split share of its common stock, payable on June 23, 2011, to stockholders of record at the close of business on June 10, 2011. The record date for the quarterly cash dividend is after the May 20, 2011, distribution date of the 2-for-1 stock split, held of record as of the close of business on May 13, 2011.
KRO's 52-week high was $33.00. It closed out last week at $24.76, down (-24.97%). Consensus for Kronos’ growth is estimated to be up +115.50% for the year.
Lubrizol Corp. (LZ) is an innovative specialty chemical company that produces and supplies technologies to customers in the global transportation, industrial and consumer markets. These technologies include lubricant additives for engine oils, other transportation-related fluids and industrial lubricants, as well as fuel additives for gasoline and diesel fuel. In addition, Lubrizol makes ingredients and additives for personal care products and pharmaceuticals.
LZ announced that earnings for the first quarter ended March 31, 2011, were $169.5 million, or $2.57 per diluted share, including $9.1 million, or $.14 per diluted share, of after-tax special charges primarily related to the pending Berkshire Hathaway (BRK.A) acquisition of Lubrizol. Comparable earnings for the first quarter of 2010 were $162.3 million, or $2.32 per diluted share, which included after-tax restructuring charges of $.6 million, or $.01 per diluted share, primarily related to restructuring initiatives in the Advanced Materials segment.
Lubrizol Corporation announced a definitive agreement for Berkshire Hathaway to acquire 100% of outstanding Lubrizol shares for $135 per share in an all-cash transaction. The transaction, which was unanimously approved by the board of directors of each company, is valued at approximately $9.7 billion, including approximately $0.7 billion in net debt, making it one of the largest acquisitions in Berkshire Hathaway history. This price represents a 28 percent premium over Lubrizol's closing price on Friday, March 11, 2011, and is also 18 percent higher than Lubrizol's all-time high share closing price.
"Lubrizol is exactly the sort of company with which we love to partner - the global leader in several market applications run by a talented CEO, James Hambrick," said Warren Buffett, Berkshire Hathaway chief executive officer. "Our only instruction to James - just keep doing for us what you have done so successfully for your shareholders."
As announced on April 26, the board of directors declared a regular dividend of $.36 per share payable June 10, 2011, to shareholders of record at the close of business on May 10, 2011. The company believes this will be the last regular dividend paid to shareholders given the pending acquisition of Lubrizol by Berkshire Hathaway, which currently is projected to close in the third quarter of 2011.
LZ's 52-week high was $135.02. It closed out last week at $134.25, down (-.57%). Consensus for Lubrizol’s growth is estimated to be up +13.70% for the year.
NewMarket Corp. (NEU) is the parent company of Afton Chemical Corporation and Ethyl Corporation. Afton Chemical develops and manufactures petroleum additives that enhance the performance of lubricating oils and fuels. From custom-formulated chemical blends to market-general additive components, Afton technology helps fuels burn cleaner, engines run smoother, and machines last longer. Ethyl Corporation manufactures diesel cetane improver and gasoline performance additives. Ethyl provides terminal storage and distribution services from its Houston, Texas, and Dordrecht, Holland, facilities.
President and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the first quarter of 2011. “Net income for the first quarter 2011 increased to $49.6 million, or $3.57 per share, an improvement of 18 percent over net income for the first quarter of 2010 of $42.1 million, or $2.78 per share. The percentage increase in earnings per share for the first quarter was 28 percent reflecting the additional benefit of the Company’s stock repurchasing activities.”
“During the first quarter of this year, we repurchased 190,573 shares of our common stock at an average cost of $126.40 per share. We ended this first quarter with $41 million outstanding on our revolving credit agreement.”
“We are very pleased with our performance and the earnings results in the first quarter of this year. We believe the strategy we are executing to deliver innovative products and services that bring value to our customers is one that will continue to produce good results for our business and our shareholders .”
The Board of Directors declared a quarterly dividend in the amount of $.60 per share on the common stock of the Corporation, payable July 1, 2011, to shareholders of record at the close of business on June 15, 2011. This is an increase of $.16 per share from the previous level.
NEU's 52-week high was $190.76. It closed out last week at $154.85, down (-18.82%). Consensus for NewMarket’s growth is estimated to be up +20.40% for the year.
Polypore International Inc. (PPO) is a leading worldwide developer, manufacturer and marketer of highly specialized polymer-based membranes used in separation and filtration processes. The products and technologies target specialized applications and markets that require the removal or separation of various materials from liquids, with such materials ranging in size from microscopic to those visible to the human eye.
PPO reported its financial results for the first quarter ended April 2, 2011, with sales of $185.7 million compared with $145.3 million in the prior-year period. Net income of $25.7 million, or $0.55 per diluted share, compared with $17.5 million, or $0.38 per diluted share, in the prior-year period.
Robert B. Toth, President and CEO, said, "Our strong performance continued in the first quarter. Demand trends remain very positive and we are keenly focused on optimizing performance while ensuring the timely startup of our investments that will bring additional capacity online in the back half of 2011 and into 2012."
Toth added, "We are at the front end of long-term secular trends associated with mobile power and purity as it relates to high performance filtration. Our first quarter performance highlights the substantial growth potential associated with these trends and the strong demand affirms our confidence in the investments we've approved to date. We will continue to assess the need and timing of additional capacity expansions."
PPO's 52-week high was $71.96. It closed out last week at $57.86, down (-19.59%). Consensus for Polypore’s growth is estimated to be up +65.70% for the year.