Investing.com -- Shares in A Schulman Inc (NASDAQ:SHLM) tumbled more than 7% in after-hours trading after the Ohio-based plastics giant posted worse than expected earnings for its third quarter and downgraded its forward guidance for the remainder of the year.
During A. Schulman 's third quarter, which ended in late-May, the plastics compounding company saw its net sales plunge approximately 13% to $560.9 million, as the negative effects of a weaker euro weighed. The currency fluctuations from the euro contributed a negative impact of more than $91 million on A. Schulman's earnings, the company said in a statement. Analysts had forecast net sales of $609 million or 0.77 per share for the period.
Still, A. Schulman CEO Bernard Rzepka did not appear downtrodden by the earnings dip. After taking into account the effects of the currency fluctuations, the company said its adjusting operating income grew by 32.1% on the quarter. A. Schulman's sales rose by 4.1% for the period in the U.S. and Canada and 4.3% in Asia.
"I am excited to report another quarter of improved operating profitability at A. Schulman, a clear sign that our strategic initiatives to transform our Company into a specialty plastics materials leader are bearing fruit. In 2010 we set a challenging target of 6.2 cents of operating profit per pound by the end of fiscal 2015 to reflect our commitment to this transformational process," Rzepka said in a statement. "In the third quarter we achieved adjusted operating profit per pound of 6 cents, and if we held the Euro to U.S. dollar currency rate at the same level that was in place when the target was established this metric would have been 7 cents."
"We continue to overcome the slow growth and foreign exchange environment by controlling what we can control and by focusing on our strategic initiatives, and as a result we were able to sequentially boost our gross margins across nearly every segment to deliver near record results."
Rzepka is also intrigued by his company's recent $800 million acquisition of HGGC Citadel Plastics Holdings, Inc. in early-June.
"This strategic acquisition greatly enhances our product scope, regional scale and efficiencies, and provides balance to our geographic footprint," Rzepka added. "With Citadel on board we are focused on leveraging the strength of the combined business, and expanding our growth potential."
For fiscal year 2015 as a whole, A. Schulman expects to record earnings per share of $2.37 to $2.42, down from previous guidance of $2.50 to $2.55. In 2014, the company posted per share earnings of $2.36.
Shares in A. Schulman fell 3.06 or 7.26% in after-hours trading to 39.10.