Compounder PolyOne (Avon Lake, OH) did not meet analyst estimates in its Q1 report, with revenue for the quarter coming in at $900 million, under the consensus estimate of $923.3 million. Although the current market challenges are temporary, in the eyes of Chairman, President and CEO Robert M. Patterson, the company is “not waiting for market improvement to unfold” and has taken “actions to reduce costs primarily through targeted workforce reductions and limiting discretionary spending,” said Patterson.
Weaker demand in some end markets and unfavorable foreign exchange led to the decline in year-on-year sales and earnings, according to 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," said PolyOne.
On the plus side, PolyOne had its best quarter ever in the composites space, and, in line with many economists and financial analysts, it expects to see a recovery in the second half of the year.