WR Grace shares gain on improved forecast

PITTSBURGH (AP) — W.R. Grace&Co. shares jumped Friday, a day after the specialty chemicals company indicated in a regulatory filing that its profit will be higher than expected in 2009.

In a Securities and Exchange Commission filing, Grace said it expects to exceed an earlier forecast of $241 million in core earnings before interest and taxes for the year. The Columbia, Md.-based company expects net income to exceed $48 million.

Those results "would would suggest that operating profits will decline by less than 20 percent this year and would represent an outstanding year considering economic conditions," analyst Jim Barrett of CL King&Associates wrote in a client note. He has a "Strong Buy" rating on the shares.

"Given that management's raised expectations presumably reflect very strong results in (the third quarter) and some visibility into (the fourth quarter), we are raising our core EBIT forecast to what should be a still-conservative $243 million," he wrote.

Barrett also raised his estimate for 2009 adjusted core earnings per share to $1.52 to $1.85.

Grace sought bankruptcy protection in 2001, following hundreds of thousands of asbestos-related lawsuits. On Friday, the company said that because of the court's schedule, it now does not expect to receive a confirmation opinionuntil 2010.

W.R. Grace shares leaped $2.26, or 11.3 percent, to $22.27 in afternoon trading.