Quantuum loss shocks Wall Street

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The Independent Online
NEW YORK - Quantuum Chemical, the big US plastics maker that Hanson agreed to buy last month, yesterday reported second-quarter losses far worse than Wall Street had predicted, suggesting a turnaround may be farther off than expected, writes Larry Black.

Chemical analysts had expected a recovery from the dollars 42m loss Quantuum posted in the second quarter of 1992, but the losses deepened during the last quarter to dollars 52m, or dollars 1.49 a share. The industry had expected a loss of about dollars 1.06 a share.

The company said sales volumes of its main product, polyethylene, were flat from a year ago, while average selling prices were lower. Reduced shipments of Quantuum's other chemicals to European markets also brought down revenues and profits for those products.

Raw material costs rose, largely because of increases in the price of ethylene and an unexpected 12-day shutdown at one of its ethylene plants in Illinois last month. Margins also declined for its other main product line, propane, but the losses were offset by lower operating expenses. The results included an dollars 800,000 charge for costs associated with the Hanson merger.