Business

Ashland's profit up just slightly

Covington-based Ashland Inc. announced fiscal first-quarter earnings Tuesday that saw revenue increase 8.2 percent, though profit increased only 1.2 percent as the costs of raw materials continued to weigh on the specialty chemical company.

Revenue for the quarter was $1.43 billion, up from $1.32 billion in the same period a year ago. Profit was $87 million, or $1.09 a share, up just slightly from $86 million. Earnings per share were down, though, from $1.10 a year ago because the company has more shares outstanding in the most recent quarter.

A hit to profit came with the jump in the cost of sales, which was up 14.8 percent year over year and well outpaced revenue growth.

"Each of our commercial units continues to implement price increases ..." Ashland CEO James J. O'Brien said in a statement. "Our success in the short term is directly related to our ability to pass through necessary pricing to offset these escalating costs."

Ashland's results included a number of key items and notes. Among them:

■ The company classified revenue from its distribution division as discontinued operations because Ashland announced a deal in early November to sell it to TPG Capital for $930 million. The sale is expected to close this quarter.

■ Efforts to reduce capacity at its performance-materials division had a $5 million negative impact.

■ The company received a $4 million boost in tax benefits due to research-and-development tax credits being signed into law and applied retroactively.

The company's four divisions going forward all saw sales increases year over year in the quarter, though all saw their operating incomes fall.

Consumer markets, which includes Lexington-based Valvoline, garnered $440 million in sales, up from $400 million a year ago. Its operating income fell, though, from $67 million to $65 million. Ashland said lubricant volume was roughly flat year over year.

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