2010-07-30 [Source: Reuters]

NEW YORK, July 29- Lubrizol Corp (LZ.N) posted higher-than-expected quarterly profit on Thursday due to the strengthening economy and boosted its full-year outlook, sending its shares up 2 percent.

For the second quarter, the company posted net income of $201.4 million, or $2.88 per share, compared with $131.9 million, or $1.92 per share, a year earlier.

Analysts on average expected earnings of $2.38 per share, according to Thomson Reuters I/B/E/S.

"We continue to perform well, and our pipeline of innovative technologies is increasing," Chief Executive Officer James Hambrick said. "I like our prospects for continuing to reward shareholders with superior long-term returns."

Revenue at the Wickliffe, Ohio-based company rose 26 percent to $1.4 billion. Analysts expected $1.33 billion.

The company boosted its 2010 adjusted earnings forecast to $9.60 to $10 per share, up from a previous range of $8.40 to $8.80. Analysts expect $8.71.

Jefferies & Co analyst Laurence Alexander said Lubrizol was well-positioned as destocking, where customers draw down existing inventories, comes to an end.

The company's "robust free cash flow yield" and "solid balance sheet imply further upside from here," said Alexander, who has a "buy" rating on the stock.

Lubrizol had sought to buy German chemical maker Cognis earlier this year, though that company ultimately went to BASF (BASF.DE), the world's largest chemical maker. [ID:nLDE65M043]

"I know that scared the bejeezus out of some of you," Hambrick, the CEO, said on a conference call with investors.

Hambrick said, though, that Lubrizol will "move on" from the Cognis loss and is seeking other potential acquisitions.

Lubrizol reiterated its plan to buy back about 10 percent of its outstanding stock. It said it had repurchased about 1.575 million shares year to date.

Shares of Lubrizol were up 2 percent at $92.80 in midday trading after rising as high as $95 earlier in the session. The stock has traded between $54.72 and $97.80 in the past 52 weeks.