You didn't think this batch of financial reports was going to contain much good news, did you?

Now that the oil sector's got the jitters, attention is naturally focused on petroleum companies. We recently looked at one refiner that's been beat up by investors ("Valero A Better Buy Than Exxon Mobil?"), largely because of shrinking crack spreads (see "Time For Crack Spreads?").

Valero, spawned in 1980, is a fairly young company. Old oil hands may recall an outfit from yesteryear - Ashland Oil - that's been making news of its own recently. Now sporting the Ashland Inc. (NYSE: ASH) handle, the maker of Valvoline products traces its history back to 1918.

Ashland has been trying to diversify itself out of the oil business to become a specialty chemicals outfit. Not to very good effect, though.

Not that Ashland started the year badly. Its stock rose, in fact, 26% through May. Then the fur and feathers began to fly. The stock's price peaked and began a precipitous decline. In the past week alone, the stock's plummeted 19% to the $38.50 range.

The reason? Two reasons, really. As a chemical company, Ashland found itself in the same inflationary boat as Dow Chemical: needing to wrench product prices higher to keep margins from thinning. As an oil company, though, cost recoupment was more problematic.

It's the margins in Ashland's Valvoline segment that worry analysts most. Ashland's due to release its numbers on Monday, July 21, and the market seems to think the Street's earnings consensus may be too optimistic. The average estimate is 84 cents a share, but with a 16-cent range between the high and low numbers, the soothsayers are all over the map. Tellingly, a quarter of the analysts are betting at the low end.

Forecasts were on the money in the March quarter, but were overly optimistic in the previous two reporting periods.

Ashland Inc. (NYSE: ASH)

The whisper number's now 84 cents.

The stock's recent price plunge, though, has now got some wags whispering of takeover. The next few days ought to allow those rumors to ripen nicely.

Stay tuned.