Huntsman profits double

Huntsman Corp., the fifth-largest U.S. chemical maker, on Wednesday reported second-quarter profit more than doubled on asset sales and acquisitions. The company said it expects to sell commodity units this year, sending the shares up.

Net income jumped to $262.9 million, or $1.13 a share, from $112.7 million, or 48 cents, a year earlier, Huntsman said. Sales were little changed at $3.34 billion. The company is run from Salt Lake City and Houston.

Excluding some items, profit fell 27 percent to $123.4 million, or 53 cents a share, beating analysts' estimates by 6 cents a share.

The company was expected to earn 47 cents a share in the second quarter, the average estimate of nine analysts surveyed by Thomson Financial. Jefferies & Co. analyst Laurence Alexander said profit in the base-chemicals and performance-products units exceeded his expectations. He rates the shares "hold."

Rising energy costs outpaced price gains in most segments. Commodity units, including base chemicals and polymers, probably will be sold rather than spun off "well before" year-end, Chief Executive Officer Peter Huntsman said.

"Our objective is to have a differentiated chemical company" with 25 percent higher profit margins than the current business, Huntsman said on a conference call with analysts and investors. "An outright sale seems to be the more attractive option," based on bids from prospective buyers, he said.

Huntsman jumped $1.44 to $17.26 in New York Stock Exchange composite trading. The percentage gain was the most since Jan. 31. The shares still are down 27 percent from a year ago.

The new company would have $9.3 billion in annual sales with revenue rising 40 percent faster, the CEO said. About 40 percent of sales would be in North America, 40 percent in the Asia-Pacific region and 20 percent in Europe, he said. The four units to be retained are pigments, polyurethanes, materials and effects and performance products, he said.

Proceeds from the sale would be used to pay debt in order to achieve investment-grade ratings, clearing the way for quarterly dividend payments, Chief Financial Officer J. Kimo Esplin said on the call.

Huntsman wants to boost the value placed on specialty businesses by selling or spinning off commodity units, whose profit fluctuates with economic cycles and energy costs.

Gains related to the sale of U.S. petrochemical assets and the purchase of a textile-dye business were $138.6 million, Huntsman said.