Revenue down for PolyOne in first quarter, job cuts coming
The challenging financial results have led the Ohio-based material supplier to reduce spending and to cut an unspecified number of jobs.
Material supplier PolyOne Corp. failed to meet analyst estimates in its first quarter 2019 report, with revenue for the quarter coming in at US$900 million, flat with the prior year as growth from acquisitions of 3.5% was offset by a 1.5% reduction in organic sales and a 2% impact due to unfavorable foreign exchange.
As a result, the Avon Lake, Ohio-based company has announced plans to cut an unspecified number of jobs.
“Like many companies in our space, we experienced weaker demand in certain end markets and unfavorable foreign exchange during the first quarter – this resulted in a year-over-year decline in sales and earnings,” said Robert M. Patterson, chairman, president, and CEO of PolyOne. “Key drivers included lower automotive sales in Europe and China which impacted Color, Additives and Inks (Color) and Specialty Engineered Materials (SEM), and a decline in construction related sales, which primarily impacted Performance Products and Solutions (PPS) in North America.”
On the plus side, PolyOne’s composite sales increased 10% organically driven by new business in consumer and electrical end markets. “Combined with strong performance from [our] January 2019 acquisition of Fiber-Line, composites-led growth added 17% to SEM operating income over the prior year first quarter,” Patterson said. “Fiber-Line had the best quarter in its history as a result of the continued build-out of 4G and emerging 5G network infrastructure.”
“We believe the current market challenges are temporary, and we will see a recovery in the second half of the year,” Patterson added. “While we are encouraged and optimistic, we are not waiting for market improvement to unfold. Accordingly, we have taken actions to reduce costs primarily through targeted workforce reductions and limiting discretionary spending. We believe these actions are prudent in the short term, but also balanced, as we are not curtailing our ability to deliver for the long term. We are continuing to invest in key end markets and innovation, and as this quarter has demonstrated, our investments in composites and sustainable solutions are paying off.”