Hexion Specialty Chemicals Inc. (HXN) swung to a first-quarter loss absent a gain that boosted prior-year results as the world's largest thermosetting resin maker's revenue increased and its margin improved.
Sales volume has been recovering from last year's woeful level across the chemical industry, and Hexion's improved 6% from the fourth quarter. Like its peers, the company has been raising prices to combat higher raw-material costs.
Chairman and Chief Executive Craig Morrison said Wednesday that Hexion is optimistic the recovery in volume will continue this year. He said the company also remains focused on cost-cutting. It achieved $33 million of savings in the first quarter and had $92 million of efforts still in the works as of March 31.
Hexion reported a loss of $7 million compared with a prior-year profit of $116 million that included a $168 million debt-extinguishment gain. Revenue increased 28% to $1.17 billion, helping gross margin climb to 12.6% from 9.8%.
Results improved from last year at all three of Hexion's segments. Sales of the company's epoxy and phenolic resins, its biggest segment, rose 24%. Its next-biggest segment, formaldehyde and forest product resins, had a 42% increase in revenue. The coatings and inks division's sales rose 20%.