WELLMAN SEES NET DROPPING IN 4TH QUARTER
SHREWSBURY, N.J. — Wellman Inc. said it expects earnings for the 1995 fourth quarter and the full year of 1996 to fall “significantly below” year-ago fourth quarter and 1995 earnings and below analysts’ estimates.
Wall Street analysts estimated Wellman would earn 50 cents a share for the fourth quarter of this year and $2.45 a share for the year ending Dec. 31, 1996.
The fiber company broke the news Wednesday after the market closed, and on Thursday, Wellman’s stock dropped 3 1/8 to 20 1/8 on the New York Stock Exchange.
Wellman said the change was due to the recent deterioration of business conditions for its worldwide polyester fiber business. Weak demand resulted in lower production volumes and increased manufacturing costs, while raw material costs have continued to increase.
As previously announced, about 10 percent of Wellman’s worldwide fiber production capacity has been curtailed, primarily due to weak demand, which is expected to continue in 1996.
In addition, fourth-quarter production problems hurt both the fibers and the polyethylene terephthalate resins businesses. For the fourth quarter ended Dec. 31, 1994, the company reported net income of $20 million, or 60 cents a share, on revenues of $251 million. For all of 1994, Wellman earned $65 million, or $1.94 a share, on revenues of $936 million. — Fairchild News Service