Huntsman (HUN) Q4 2009 earnings summary

Executive summary

• FY 2009 revenue fell 24% YoY to $7.763B amid weaker prices and volumes; net income attributable to shareholders was $114M, with results substantially affected by merger-litigation settlement income.

• Fourth-quarter revenue was $2.096B and net income attributable to shareholders was $66M; sales volumes rose 13% YoY.

Financial highlights

• Gross profit declined 16% to $1.068B; operating loss was $71M versus operating income of $165M in 2008.

• EBITDA was $1.158B, down 24% YoY; it included $835M of income associated with the terminated merger and related litigation.

• Net income attributable to shareholders fell 81% to $114M; diluted EPS was $0.48 versus $2.60 in 2008.

• Operating cash flow rose to $1.104B from $767M, supported by settlement proceeds and favorable working-capital movements.

Outlook and guidance

• 2010 capital expenditures expected at $250M-$275M, funded through available cash and operating cash flow.

• Demand outlook was strongest in Asia; U.S. recovery was expected to track construction and automotive markets, while European recovery remained uncertain.

• Raw-material and energy costs could rise; anticipated price pass-through could take 90-120 days in some product lines.

• Port Neches PO/MTBE turnaround was expected to run through Q1 2010 and negatively affect Polyurethanes results; startup remained subject to construction and weather delays.