St. Louis, MO, Oct. 9--Solutia, Inc. indicated that it expects an after-tax loss in the range of $1.65 to $1.70 per share for the third quarter. This loss includes charges in the range of $1.40 to $1.50 per share. Operating results compared to the prior year quarter were negatively impacted by higher raw material and energy costs, and extended maintenance downtime at the company's acrylonitrile facility in Alvin, Texas.
"We have continued to be challenged by weak economic conditions, which have been exacerbated by unusually high raw material and energy costs. Unfortunately, we believe these conditions will persist for some time to come," said chairman and chief executive officer John C. Hunter.
The company expects to record a restructuring charge of approximately $.55 per share resulting from actions by Astaris, its 50% owned joint venture, during the quarter. The Astaris restructuring plan will focus on fixed cost reduction through asset optimization and selective product and facility rationalizations, including the Conda, Idaho, purified wet acid facility, which has performed significantly below the expectations established during the formation of the joint venture.
A charge of approximately $.70 per share will be recorded for the previously announced Anniston PCB settlement and an increase in certain other litigation accruals. The company will also record a non-cash, pension settlement charge of approximately $.20 per share in the quarter due to the significant level of lump sum payouts to separated employees in the current year.
"With the Anniston litigation settlement and the closing of the new credit facility, we can now focus on the significant financial issues ahead of us including addressing debt maturities, reducing our leverage, managing the continuing drain from legacy liabilities and satisfying our pension obligations. We will continue to explore all alternatives to properly address these issues," said Hunter.
