Covington-based Ashland Inc. announced fiscal first-quarter earnings Tuesday that saw improved performance for its Valvoline division.
Overall, the specialty chemical company said it earned $86 million, or $1.10 a share, on $2.02 billion in revenue. A year ago, it reported a net loss of $119 million, or $1.73 a share, on $1.97 billion in revenue.
Its results compared to a year ago were boosted by the acquisition in November 2008 of Hercules Inc., which provides water treatments in the pulp and paper business and creates ingredients for food and pharmaceuticals. Revenue would have been down year over year had the year-ago results included Hercules' performance from the beginning of the quarter in October 2008 to the time of its acquisition by Ashland on Nov. 13.
The company said revenue would have been $2.23 billion in the quarter in 2008, meaning a drop of 10 percent year-over-year.
A number of one-time charges affected earnings in both this past quarter and the year-ago period. In this past quarter, Ashland saw a benefit of $6 million, or 8 cents per share, in income tax effects. A year ago, one-time items dropped earnings per share by $1.98.
In a statement, CEO James J. O'Brien emphasized that the company has improved its profitability.
"Modest growth in underlying demand, gross margin increases in all of our commercial units and our continued focus on cost reductions contributed to this improved performance," he said.
Specifically, he said the company saw $405 million in certain cost reductions, exceeding the $400 million it had sought.
Ashland said each of its core divisions, except Ashland Consumer Markets, saw year-over-year revenue losses in the quarter.
Ashland Consumer Markets, which includes Lexington-based Valvoline, saw sales rise 3 percent from a year ago to $400 million. The company said total lubricant volume rose 22 percent above a year-ago quarter that was deemed "unusually weak."
Sales at Valvoline Instant Oil Change stores open at least a year rose 4 percent in the quarter compared to a year earlier.
"Each of our businesses is currently showing some signs of demand improvement and stable or improving margins," O'Brien said. "Although raw material cost increases may well occur during the fiscal year, our continued emphasis on pricing and cost management should support both increased profitability and growth as the economy recovers."