Thursday, OM Group Inc. (OMG), a manufacturer of specialty chemicals and advanced materials, reported a sharp rise in third quarter profit compared to last year primarily due to an income tax benefit. Revenues increased 70% from previous year quarter as a result of both organic growth and contribution from acquisitions.

Third quarter net income increased to $56.26 million or $1.85 per share from $38.09 million or $1.26 per share in the year-ago period.

Net income for the quarter included a non-recurring income tax benefit of $25.1 million or $0.83 per share, related to an election to take foreign tax credits on prior-year U.S. tax returns.

On an adjusted basis, income from continuing operations for the quarter was $30.65 million or $1.01 per share, lower than $42.44 million or $1.40 per share in the same period last year.

Analysts polled by First Call/Thomson Financial expected the company to earn $0.79 per share for the quarter.

Quarterly net sales rose 70% to $448.63 million from $264.64 million previous year. The growth in revenues resulted from higher product selling prices, which contributed $79.9 million, organic volume growth within the Advanced Materials segment of $27.5 million and an increase in cobalt metal resale of $19.4 million. Coatings and electronic technologies businesses, which were acquired in the fourth quarter previous year, added $72.3 million in net sales.

Net sales for the Advance Materials segment increased to $306.8 million from $193.3 million in the third quarter of last year. The increase was driven by higher product selling prices due to an increase in the reference price for cobalt, growth in metal resale and greater volume.

Net sales from the Specialty Chemicals segment nearly doubled to $142.3 million from $72.0 million last year, due primarily to acquisitions and higher selling prices in Advanced Organics. But, these benefits were partially offset by lower volumes and unfavorable pricing in Electronic Chemicals due to a decline in the price of nickel.

For the first nine months of the year, net income declined to $167.72 million or $5.53 per share from $198.88 million or $6.58 per share in the same period a year ago.

Adjusted income from continuing operations for the year-to-date period was $144.81 million or $4.77 per share, compared to $121.87 million or $4.03 per share in the earlier year period.

Net sales for the nine-month period increased to $1.44 billion from $712.13 million a year earlier.

OMG is currently trading at $22.30, up $2.92 or 15.07% on NYSE. – RTTNews