Chemical earnings rise again in first quarter
Transcript of Chemical earnings rise again in first quarter
Β. St. John, director of the Plant Sciences Institute of the Department of Agriculture's Agricultural Research Service; and Nobel Laureate Glenn T. Seaborg from the University of California, Berkeley.
Another event was a symposium on "America's Love and War with Science: The Coevolution of Science and Society in the 20th Century," featuring a panel of scientists and journalists. Crew gave an historian's perspective on how society's perceptions of risks and benefits change, using human radiation exposure as an example. And there was discussion over whether there is a new paradigm for science in the U.S. between Nobel Laureate chemist Jerome Karle, chief scientist of the Laboratory for the Structure of Matter at the Naval Research Laboratory, and Erich Bloch, distinguished fellow at the Council on Competitiveness and former NSF director.
To complement the Smithsonian exhibit, an "electronic field trip" for middle-school students has been developed to make the show available to students who may not be able to visit it. To be conducted May 5 and 12, the field trip will include teacher support materials, an orientation videotape, and an interactive teleconference.
In the two weeks following the field trip, students will be able to post questions about the exhibit using a computer bulletin board that will be accessible through an 800 number. The field trip, produced by Fairfax County, Virginia, public schools, is supported by the NSF's National Science & Technology Week and by ACS, with the cooperation of the Smithsonian Institution.
Linda Ross
Chemical earnings rise again in first quarter In the first quarter of 1994, U.S. chemical companies continued the earnings increases they began in the second quarter last year. Results reported by press time show further gains for major companies—although, when all figures are in, growth for the industry probably will not match the 36% year-to-year jump seen in the fourth quarter of 1993.
Early returns show that earnings for 18 large- and medium-sized chemical
firms rose an average 15% in the first quarter on a sales increase of just 4%. Thus, profitability also climbed for the group—to an aggregate 6.1% from 55% in the same three-month period a year ago.
While the average rise in earnings was 15%, few of the companies with increases were near that average. Firms with earnings increases usually registered a very healthy rise—especially among the very large firms. Dow Chemical, for instance, racked up an earnings increase of 35%, Monsanto's earnings rose 38%, and Union Carbide's earnings soared 69%. Earnings are from continuing operations, excluding significant unusual items.
Of the 18 companies reporting so far, just seven had earnings declines from a year ago. And most of these drops could be called moderate, with large decreases only at Ethyl (33%) and Great Lakes Chemical (29%).
Moreover, the improvement in earnings is spreading outside chemical firms (defined as those with more than 50% of their sales in chemicals) to diversified companies with chemical operations. For instance, earnings at diversified DuPont, the largest U.S. chemical producer, increased 39% for the quarter. Most of the rise came from its chemical-related oper
ations: After-tax income for polymers rose 91%, fibers were up 41%, and chemicals up 20%. By contrast, earnings at DuPont's petroleum unit grew less than 8%.
Companies are still crediting lower costs for their increased earnings. For example, Carbide chairman Robert D. Kennedy says his company continues to benefit from progress in its cost reduction efforts and from improved results in its joint ventures.
Monsanto chairman Richard J. Ma-honey points out, "Earnings growth in the first three months of 1994 is a direct result of driving for shareholder value and adhering to three basic goals: achieve the full potential of key products, aggressively control costs and improve capital productivity, and establish future products." Monsanto raised operating profits in all its business segments except its NutraSweet subsidiary.
In addition to containing costs, chemical companies are finally expanding their markets. Dow chairman Frank Popoff notes, "We're very encouraged by the improvement in our operating income, which reflects enhanced productivity, continued economic growth in North America, and the beginning of an upturn in Europe."
However, Dow also is seeing im-
Earnings have begun to climb for many chemical
Air Products Arco Chemical Dow Chemical Eastman Chemical Ethyl
Georgia Gulf W. R. Grace Great Lakes Chemical IMC Fertilizer Loctite
Lubrizol Monsanto Nalco Chemical Olin Praxair
Rohm and Haas Union Carbide Witco
FIRST-QUARTER 1994 Sales Earnings3
($ millions)
$ 858.6 757.0
4,541.0 983.0 234.0
192.9 1,076.8
448.7 410.5 159.9
397.8 2,001.0
336.2 604.9 611.0
856.0 1,126.0
553.4
$ 73.1 45.0
171.0 56.0 14.0
12.7 38.2 66.9 5.4
18.3
43.3 194.0 33.8 15.3 42.0
67.0 71.0 22.0
a After-tax earnings from continuing operations, excluding significant earnings as a percentage of sales, def = deficit.
Change from 1993 Sales Earnings
3% -1
4 4
-8
6 9 4
84 7
9 3
-1 2 3
4 -6
0
nonrecurring
-3% -13
35 -5
-33
26 21
-29 def -7
22 38 -4 31 27
16 69 17
companies
Profit marginb
1994
8.5% 5.9 3.8 5.7 6.0
6.6 3.5
14.9 1.3
11.4
10.9 9.7
10.1 2.5 6.9
7.8 6.3 4.0
1993
9.0% 6.8 2.9 6.3 8.3
5.6 3.2
21.9 def 13.2
9.7 7.3
10.4 2.0 5.6
7.0 3.5 3.4
and extraordinary items, b After-tax
MAY 2,1994 C&EN 5
NEWS OF THE WEEK
provement because of cost containment. Popoff says that in the first quarter his company achieved savings in research, promotion, selling, and administrative expenses of $40 million over the same period a year ago. And this happened despite additional expenses following consolidation of two pharmaceutical subsidiaries.
William Storck
Oriented zeolite growth on surfaces achieved The first oriented growth of molecular sieve (zeolite) crystals on surfaces has been achieved by graduate student Sue Feng and chemistry professor Thomas Bein of Purdue University.
The work, reported in last week's Nature [368, 834 (1994)], represents a new thrust in the synthesis of zeolitic materials. It could potentially lead to the ability to achieve greater control over physical and chemical processing with controlled-porosity media.
In their research, Feng and Bein deposited an analog of zeolite X by crystallization on gold-coated silicon substrates modified with metal phosphonate multilayer films. The organophosphonate films promote nucleation and growth of the zinco-phosphate zeolite from the synthesis mixtures.
Scanning electron micrographs show that single layers of the zinco-phosphate crystals are produced, with more than 90% of them having their (111) faces oriented to the substrate. The nearly perfect orientation of the crystals is further supported by the evidence of diffraction patterns.
Bein attributes ordered growth of the zinco-phosphate crystals in part to the growth control provided by the organophosphonate layer. Only a triple layer of phosphonate-zirconium-bisphos-phonate is found to be effective.
Potential applications for highly ordered zeolites include catalytic membranes—possibly incorporating encaged metals—and manufacture of highly sensitive chemical sensors for environmental monitoring. For example, oriented zeolitic materials might provide restricted access only for specific molecules to the surface of field-effect transistors or other electronic sensors.
The Purdue group's research thus far
Scanning electron micrograph shows molecular sieve (zeolite) crystals grown on gold substrate modified with organophosphonate films (bar = l(tym).
has been focused on the zinco-phosphate zeolites, but other materials might prove to be of greater utility. Bein explains that "We are now investigating the application of our synthesis techniques to a broader range of zeolites . . . such as aliurrinophosphates."
Joseph Haggin
Bills for pesticide-food safety reform unveiled The Clinton Administration has unveiled its long-awaited legislation to reform U.S. pesticide laws, particularly as they affect food safety. However, neither industry nor some public interest groups are happy with the provisions.
The legislative proposal, incorporated in two bills, is very similar to the broad reform policy for pesticides and food safety outlined by the Administration last fall (C&EN, Sept. 27, 1993, page 6). The bills call for setting stricter tolerance levels for pesticide residues in food, paying particular attention to safety factors for "potentially sensitive subpopulations" and for children.
The bills also would modify the Delaney amendment, which prohibits addition into processed food of any chemical known to cause cancer. Pesticide residues would be allowed if scientific evidence indicates they pose no health hazard.
The legislation includes incentives for development of alternative pest management materials and provides for priority review for "reduced risk pesticides." It bans export of pesticides not
approved for use in the U.S. because of health concerns, with some limited exceptions.
The bills were unveiled at a Washington, D.C., press conference featuring officials from the Environmental Protection Agency, Food & Drug Administration, and Department of Agriculture, and key members of Congress. EPA Administrator Carol M. Browner noted that "after a year of hard work, we have a sound, realistic proposal for ensuring a safe food supply for all Americans and our children. This comprehensive package represents real change."
Sen. Edward M. Kennedy (D.-Mass.), chairman of the Senate Committee on Education & Labor, hailed the unprecedented cooperation among EPA, USDA, and FDA that led to the bills, calling it overdue: "The current regulatory scheme is plagued with loopholes. Older pesticides are tolerated in the absence of complete information about their health effects. We are gambling with public health on a broad range of potentially cancer-causing and toxic pesticides."
Observers outside government are less pleased. The legislation "imposes overly conservative, inflexible standards and procedures to regulate pesticides," notes Jay J. Vroom, president of the National Agricultural Chemicals Association. And Juanita Duggan, senior vice president of government affairs at the National Food Processors Association, says, "After waiting for seven months, EPA has put forward legislation that is not science based and falls far short of what is needed to reform the nation's regulation of pesticides."
However, the Environmental Working Group (EWG)—which has been actively pushing to tighten restrictions on pesticide residues in food—calls the legislation too weak. "It is a good start, but it doesn't go far enough to remove from use the highest risk pesticides, those listed as probably human carcinogens," says EWG legislative specialist Susan Elderkin.
And Greenpeace, which is waging a major campaign over pesticide exports, assails the legislation as "more smoke than fire." Greenpeace pesticide information coordinator Sandra Marquardt adds, "The export provisions of the [legislation] really amount to a continuum of the status quo."
In any case, prospects for pesticide reform aren't good this year. There will
6 MAY 2,1994 C&EN