PolyOne announces Q2 2010 results

Consolidated revenues grew 40% year-over-year driven by a 27% increase in volume, and higher selling prices principally associated with raw material cost increases.  Sales decreased 1% due to a weaker euro.  Each of the company's three strategic platforms recorded double-digit sales and operating income increases attributable to new business gains and improving demand conditions.

"During the second quarter we achieved milestone performances in each of our three platforms,” said Stephen D. Newlin, chairman, president and CEO. "Both Specialty and Distribution achieved record levels of quarterly operating income and operating margin from Performance Products and Solutions reached a new quarterly return on sales record of 8.1%.”

Newlin continued, "I am particularly pleased with these results when you consider demand from two of our key end markets, housing and auto, remains near historic lows.”

Sales by end markets

"Over the last three years we have diversified our portfolio by growing our business in highly attractive and less cyclical end markets such as healthcare, consumer products and packaging,” said Newlin. "In fact, despite continuing trough-like demand conditions in housing and auto, our quarterly earnings per share have nearly doubled from prerecession
levels (second quarter 2008).”

The consensus estimate for US housing starts is 650 thousand in 2010, well below the 50 year statistical average of 1.5 million per year†. Similarly, at 11.5 million vehicles*, the consensus estimate for U.S. auto and light vehicle sales this year does not yet equal the estimated scrap rate of 12.0 million vehicles per year or the long term average of 15 million vehicles sold per year (dating back to 1980). Newlin added, "Demographic projections support returning to historic average levels of housing starts and auto sales at some point in the future. We view an eventual recovery in these end markets as upside to our current record setting performance.”

Overview first half 2010 sales by end markets
  • Consumer 15%
  • Transportation 14%
  • Building & Construction 13%
  • Wire & Cable 10%
  • Packaging 10%
  • Industrial 10%
  • Misc. 10%
  • Healthcare 8%
  • Electrical & Electronics 5%
  • Appliances 5%