Axiall Corp. (AXLL), the vinyl-products maker that changed its name from Georgia Gulf Corp. in January, fell the most in almost a year after posting first-quarter earnings that missed analysts’ estimates amid higher costs.
Axiall declined 8.5 percent to $50.69 as of 10:19 a.m. in New York. The shares earlier dropped 12 percent, the most intraday since May 18.
Adjusted earnings fell to 75 cents a share, Atlanta-based Axiall said today in a statement. The average of nine estimates compiled by Bloomberg was $1.18 a share. The Jan. 28 acquisition of chlorine assets from PPG Industries Inc. (PPG) helped boost sales 23 percent to $1.06 billion, the company said, trailing the $1.13 billion average estimate.
Adjusted earnings before interest, taxes, depreciation and amortization in the chlorovinyls unit, which has more sales than the other two businesses combined, nearly tripled on the chlorine unit acquisition. Earnings gains were restrained by lower selling prices for resins and higher costs for ethylene, a raw material in the manufacture of vinyl, Axiall said.
“The issue was margins,” Jeffrey J. Zekauskas, a New York-based analyst at JP Morgan Chase & Co. who recommends buying the shares, said today in a report. Ethylene prices “may have been a primary source of the margin squeeze.”
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