Rohm & Haas cuts 900 jobs

January 20, 2009 6:48:25 PM PST
Specialty chemicals maker Rohm & Haas Co. said Tuesday that it's cutting about 900 jobs, idling or closing plants and will record $90 million in pretax charges for the fourth quarter as it looks to slash costs in a weakening economy. As part of the cost-cutting plan, Philadelphia-based Rohm & Haas also said it is freezing employee salaries and discretionary spending.

The job cuts represent about 6 percent of the company's work force.

"We will continue to aggressively protect our company from the challenges of deteriorating market conditions and a weakening economy," Raj L. Gupta, Rohm & Haas' chairman and chief executive, said in a statement.

Rohm & Haas said it plans to complete the latest restructuring this year.

Dow Chemical agreed last year to buy Rohm & Haas for $15.3 billion. The outcome of the deal was called into question when a Kuwaiti company in December backed out of a $17.4 billion joint venture with Dow just days before it was to close.

Dow has said it doesn't need the money from the Kuwaiti venture to complete the deal, and both companies say the transaction, which is still awaiting U.S. antitrust clearance, will be completed.

Analysts say the cuts by Rohm & Haas are just the latest signs of trouble in the chemical sector, and are not tied to the deal with Dow.

"I don't think this is company specific," said Dimity Silversteyn of Longbow Research. "This is a response to a tough environment."

Rohm & Haas also said it expects adjusted earnings per share from continuing operations for the quarter to exceed the current analyst consensus estimate. Adjusted earnings per share excludes one-time items such as restructuring and asset impairment charges, costs related to the proposed merger with Dow and other one-time costs such as the effect of hurricanes on the company's operations.

Analysts surveyed by Thomson Financial are looking for a profit of 62 cents a share on revenue of $2.3 billion. Such estimate usually exclude one-time charges.

Rohm & Haas shares fell 4.3 percent, or $2.58, to close at $58 Tuesday. The shares have traded between $44.13 and $76.50 over the past year.

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