What Do Earnings Tell Us About Chemicals and Agriculture?
Strengthening demand and improved cost structures boost profitability for many players.
Several themes emerged as chemicals and agriculture companies reported earnings for the second quarter of 2010. We have highlighted the most important trends below.
Chemicals companies reported stronger demand from nearly every geography for almost every product. Of course, demand from emerging markets once again outpaced demand from developed economies. Areas of notable end-market strength included automotive markets. BASF, DuPont (DD), and Rockwood (ROC) were among the many companies reporting improving demand from nearly every market. A notable casualty of developed market underperformance was AkzoNobel's (AKZOF) decorative paints business. Meanwhile, against the backdrop of slower recovery in North America and Europe, Ecolab (ECL) was able to add share in important end markets, as its products help customers cut spending on water and energy--a good proposition in a weak economic environment.
Elizabeth Collins does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.