Orica Limited (ORI) is mainly focused on producing and distributing industrial chemicals, fertilisers, and explosives and some consumer products. The company has operations in over 40 countries.

Recently, ORI reported its 1H10 results, making it one of the key stocks to watch.  Net profit dropped 75% on-year to $55.1 million, while an interim dividend of 41 cents per share was declared.

After stripping out significant items profit came in at $293.2 million, which topped analyst estimates of a pre-abnormals profit of $267 million.

Sales dropped 19% to $3.2 billion, which ORI attributed to unfavourable foreign exchange movements, adverse weather conditions and a soft US coal market.

Going forward, ORI expects a recovery in market demand for its products to lift FY10 profit above that reported in 2009.

Separately, Orica Limited revived plans to divest its Dulux paint business.  The decision is a sensible one as it will allow ORI to focus on its core businesses.

With stocks to watch, attention should always be paid to a company’s market expectations.  ORI expects demand for its products to lift over the coming six months, and if expectations pan out, there is a good chance ORI will see a corresponding increase in its profit.

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