Kraton Corp. warned Thursday of a third-quarter earnings shortfall, as the company said its polymer and chemicals business was hurt by weakening demand. The company expects net income for the quarter through September of $21 million, down from $42.3 million a year ago, and below the FactSet consensus of $35.1 million. Kraton said it expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to be $80 million, compared with the FactSet consensus of $101.4 million. "Despite opening our third quarter in July with stable market indications, fundamentals including demand in China and broader Asia, and more recently in Europe and North America, weakened notably as the third quarter of 2019 progressed," said Chief Executive Kevin Fogarty. Because the company said it does not expect market conditions to improve for the rest of the year, it now projects 2019 adjusted EBITDA to be 10% to 15% below the lower end of its previous guidance of $370 million to $390 million, after saying in July it expected adjusted EBITDA to be at the "lower end" of guidance. The stock, which was still inactive in premarket trading, has rallied 37.7% year to date, while the S&P 500 has gained 16.5%.
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