Quarterly sales fall at Ashland

Covington-based Ashland Inc. announced quarterly earnings Tuesday that came in below analysts' expectations, leading to a drop in the company's share price.

The specialty chemicals company had sales of $1.87 billion in its fiscal first quarter that ended Dec. 31, down 3.2 percent from $1.93 billion in the same period a year ago. The company's net income rose, though, to $101 million, or $1.26 per share, from $61 million, or 77 cents a share, in the same period a year ago.

Shares of the company's stock (NYSE:ASH) fell $5.10, or 6 percent, to close Tuesday at $80.43.

A number of one-time items, including the effect of an insurance settlement, boosted earnings in the most recent quarter by 15 cents per share. Earnings per share in the year-ago quarter were dragged down 44 cents per share by a combination of one-time items.

"Ashland had a challenging quarter," CEO James J. O'Brien told analysts in a morning conference call. "During the last two weeks of December, a number of our customers curtailed purchasing, particularly in the emerging markets.

"They have returned to more normal purchasing patterns in January."

The results were also affected by a $31 million write-down on the value of the company's inventory of guar, a chemical used in extracting oil and natural gas through fracking.

"The inventory and earnings volatility issues we have faced over the past several months are behind us," O'Brien said. "Our strategy certainly has not changed because of one challenging quarter."

Results were better at the company's consumer markets division, which includes Lexington-based Valvoline. The division garnered $481 million in sales, up 1.3 percent from the same period a year ago. The division's operating income, though, rose 40.4 percent to $66 million from $47 million a year ago because of lower raw material costs.