UPDATE 2-W.R. Grace posts profit beat, lifts sales forecast

* Adj Q3 EPS 75 cts vs. Street forecast 65 cts

* Revenue down 9.5 pct

* Construction unit remains weak due to euro

* Boosts 2010 sales forecast
(Adds CFO interview, analyst comment, stock movement, byline)

By Ernest Scheyder

NEW YORK, Oct 21 (BestGrowthStock) – Chemicals and building
products maker W.R. Grace & Co (GRA.N: ), which is operating
under bankruptcy protection, posted a 24 percent jump in
quarterly profit on Thursday and boosted its revenue forecast.

Delaware Judge Judith Fitzgerald said earlier this week
that she had prepared a draft of a ruling that would release
W.R. Grace from bankruptcy and hoped to issue it by year’s end,
Chief Financial Officer Hudson LaForce told Reuters.

Despite its bankruptcy status, W.R. Grace remains bullish
on the future, lifting its 2010 sales forecast to a range of
$2.64 billion to $2.66 billion from a previous outlook of $2.60
billion to $2.65 billion.

“The new outlook is a function primarily of how well the
businesses are functioning,” LaForce said.

For the third quarter, the company posted net income of
$54.9 million, or 74 cents per share, compared with $44.4
million, or 61 cents per share, a year earlier.

Excluding one-time items, profit was 75 cents per share. By
that measure, analysts expected 65 cents, according to Thomson
Reuters I/B/E/S.

Jefferies & Co analyst Laurence Alexander said the earnings
showed W.R. Grace offers investors a key chance to get in on
the economic recovery due to several near-term catalysts as it
emerges from bankruptcy.

Revenue fell 9.5 percent to $682.1 million.

The year-ago period included results from the Advanced
Refining Technologies LLC joint venture with Chevron Corp
(CVX.N: ), which began operations in 2001.

Last November W.R. Grace sold a 5 percent stake in the
joint venture back to Chevron, bringing each company’s share to
50 percent.

That triggered an accounting change, whereby W.R. Grace no
longer lists the joint venture’s revenue as part of its own,
but rather as an equity stake on the balance sheet, executives
said.

“On an apples-to-apples basis, our sales were flat
year-over-year,” LaForce said.

W.R. Grace’s Davison unit, which makes refinery catalysts,
specialty catalysts and engineered materials, saw sales
increase 2.6 percent.

But sales in the construction business, which supplies
building materials and chemicals fell 4.6 percent.

“The biggest part of that change was currency,” LaForce
said. “Our biggest single exposure is the euro.”

The Columbia, Maryland-based company cut costs by 7.8
percent year over year.

W.R. Grace’s stock, which closed Wednesday at $29.55, has
risen 16.6 percent so far this year.
(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn)

UPDATE 2-W.R. Grace posts profit beat, lifts sales forecast