Fairlawn polymer company A. Schulman Inc. on Tuesday again lowered its earnings guidance for the year as it reported that third-quarter net income and revenue were down from a year ago.
Schulman, which provides plastic compounds and resins, now expects to earn $1.70 to $1.80 per adjusted share instead of previous guidance — issued in April — of $2.08 to $2.13.
The initial guidance for the year was $2.14 to $2.19.
Joseph Gingo, chairman, president and chief executive officer, said in a statement the “challenges experienced in the third quarter in Latin America are temporary and not systemic in nature. We will resolve them during the fiscal fourth quarter and we look forward to significant growth in fiscal 2014.”
Gingo said the costs and disruption related to the consolidation of two existing Brazilian facilities into one new plant “were greater than we anticipated, which resulted in a negative impact on our third quarter results.” He said the new plant in Brazil will be up and running during the fiscal 2014 first quarter and “will better position us to meet customer demand in an efficient manner.”
The company reported net income for the third quarter ended May 31 of $5.2 million, or 18 cents per share, on sales of $548.6 million. A year ago, Schulman reported earning $17 million ,or 57 cents per share, on revenue of $563.1 million.
The company said the sales figure for this year’s third quarter was hurt by $1.9 million of foreign currency translation.
Gingo said that the company continues to face “inconsistent order patterns” in Europe. The global company has taken measures to improve its financial performance, including consolidating plants and cutting jobs.
Schulman shares closed up $1.01 to $27.83. The stock is down 4 percent since Jan. 1 and up 40 percent from a year ago.
Katie Byard can be reached at 330-996-3781.