USA: Solutia Warns Of Wider Q2 Loss
Fibre maker Solutia Inc issued a profit warning on Wednesday saying it expects to post a second quarter loss of 15 to 20 cents a share.
The St Louis-based firm, which this week announced plans to axe 200 jobs at one of its textile factories, said the loss includes restructuring charges of six cents to seven cents per share.
The company said operating results were hurt by higher-than-expected raw material and energy costs and weaker downstream markets in the integrated nylon business segment, most notably in the Acrilan product line.
It added it does not expect the operating environment to improve much during the year and has begun talks to refinance a $300 million credit facility from which it was recently granted relief from certain financial covenants.
Chairman and CEO, John Hunter, said: "The second quarter has proven to be a very difficult one for Solutia as our businesses continued to be adversely impacted by the weakened state of the manufacturing sector, characterised by significant overcapacity and persistently high raw material and energy costs.
"These factors have resulted in a decline in our Integrated Nylon business segment during the quarter and we unfortunately do not see the current operating environment improving significantly over the remainder of the year."
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