Solutia Warns of a Wider-than-expected 2nd Qtr. Lo
St. Louis, July 3--Solutia Inc. has warned that it expects a second-quarter loss of 15 cents to 20 cents per share due to higher-than-expected raw material and energy costs and weakness in downstream nylon markets.
The company said the loss includes restructuring charges of 6 cents to 7 cents per share. Wall Street analysts on average expected an operating loss of 2 cents a share, according to research firm Thomson First Call.
Solutia said operating results were negatively impacted by higher-than-expected raw material and energy costs and by weaker downstream markets in the integrated nylon business segment, most notably in the Acrilan product line which has been hurt by the continued, severe decline of the U.S. textiles industry.
The company said it does not see the current operating environment improving significantly over the remainder of the year and it has initiated discussions to refinance a $300 million credit facility from which it was recently granted relief from certain financial covenants.
