Ashland (NYSE:ASH) Earnings Lowered on Sale of Distribution

Ashland Inc. (NYSE:ASH) earnings will be under pressure based on sale of Distribution, according to Jefferies.

They said, "We estimate the sale of Distribution will result in roughly $50m in stranded costs. We expect roughly half will be covered by transition services revenue in fiscal 2011. We expect Ashland to absorb uncovered stranded costs of $8m in Q1, $7m in Q2, $6m in Q3, and $4m in Q4 of 2011."

Earnings per share was cut to $4.05 for full year 2011, a drop of $0.15, and earnings for full year 2012 was lowered to $4.65, a decrease of $0.05.

Ashland closed Thursday at $53.12, gaining $1.26, or 2.43 percent. A price target of $68 is on the company, along with a "Buy" rating.