OMNOVA Solutions Inc.’s ( OMN - Snapshot Report ) fiscal 2010 second-quarter earnings surged to $15.1 million or 33 cents per share from $5.1 million or 12 cents in the year-ago period. The quarterly results also surpassed the Zacks Consensus Estimate of 19 cents. The better-than-expected results were primarily attributable to a solid growth in sales and management efforts to contain overheads. Shares of the company jumped more than 9% in pre-market trading on the New York Stock Exchange as investors cheered the news.

OMNOVA designs, develops, produces and markets emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end-uses. The company’s solutions offer distinctive performance and aesthetic attributes to products that people use daily. OMNOVA reports operating results under two business segments: Performance Chemicals, which is the flagship division, and Decorative Products.

OMNOVA’s net sales logged a growth of 40.4% to $226.4 million from $161.3 million in the year-ago quarter. The robust expansion was mainly driven by higher selling prices, strong volume growth and favorable foreign currency translations. In terms of segments, Performance Chemicals posted a growth of 59.3% year-over-year to $138.6 million, while Decorative Products grew 18.2% to $87.8 million.

Gross profit recorded a growth of 18.0% year-over-year to $47.2 million, while gross margin declined 400 basis points (bps) to 20.8%. The reduced gross margin was primarily caused by increased raw material costs and unfavorable product mix.

Selling, general and administrative expenses declined marginally by 0.4% year-over-year to $25.6 million due to management’s cost containment initiatives. Accordingly, OMNOVA’s earnings before interest and income taxes (EBIT) grew 26.9% to $9.9 million from $7.8 million in the prior year quarter.

At the end of the quarter, OMNOVA had cash and cash equivalents of $42.0 million and long-term debt-to-capitalization of 79.1%, compared to a cash balance of $23.7 million and long-term debt-to-capitalization of 78.2% in the year-ago period. During the quarter, the company utilized $2.4 million towards capital expenditure, compared to $1.7 million in the year-ago quarter.

Looking ahead, OMNOVA warned that it may suffer an adverse impact of 6 cents to 8 cents per share on its earnings for the third quarter of fiscal 2010 due to a strike at its Columbus, Mississippi-based facility. The strike is in response to a new contract proposal from the company, which was rejected by the local union. The Zacks Consensus Estimate on OMNOVA’s earnings for the third quarter is currently pegged at 25 cents per share, which remained unchanged over the past 3 months.

For the entire fiscal 2010, the Zacks Consensus Estimate presently stands at 84 cents per share, which moved up a penny over the past 2 months.