HOUSTON (AP) — KMG Chemicals Inc., which makes wood preservatives and weed-killing chemicals, said Tuesday its fourth-quarter profit soared on cost-cutting and improvements in all its businesses.

The company said it expects a strong first quarter in fiscal 2010, but that higher raw material prices and reduced demand for treated wood by utilities and railroads "will cause a partial retraction in the exceptional profitability we have experienced in recent quarters."

KMG Chemicals said it assumes a gradual economic recovery.

The company earned $4.9 million, or 44 cents per share, in the three months ended July 31, up from $571,000, or 5 cents per share, a year earlier.

Revenue fell 6 percent to $48.4 million from $51.4 million in the same quarter last year.

For the full year, KMG Chemicals said net income was $10.2 million, or 91 cents per share, up from $5.4 million, or 48 cents per share, a year ago. Annual revenue rose to $190.7 million from $154.4 million a year ago.

Chief Financial Officer John V. Sobchak said cost-cutting, including after the integration of the electronic chemicals business acquired in the last fiscal year, and reduced inventories and accounts receivable, particularly in that business, "have made KMG a leaner company with substantially reduced working capital requirements."

KMG Chemicals repaid a revolving loan, giving the company $35 million of borrowing available and a strong cash position at the end of the fiscal year.

Shares rose 2 cents to $11.92 in morning trading after rising to a 52-week high of $12.97 earlier in the session.