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ENGELHARD REPORTS SECOND-QUARTER RESULTS

ISELIN, NJ, July 27, 2004 - Engelhard Corporation (NYSE: EC) today reported net earnings for the second quarter ended June 30 of $68.0 million, or 54 cents per share on a diluted basis, compared with $54.0 million, or 43 cents per share, for the same period a year ago.

       During the second quarter, Engelhard and the U.S. Internal Revenue Service reached agreement with respect to the company's tax returns for 1998 through 2000. That resulted in reversal of previously accrued income taxes totaling $8 million, which improved results by six cents per share. The prior year's quarter included an after-tax charge of four cents per share related to the remaining lease cost of storage facilities no longer needed as a result of productivity initiatives.

       Second quarter sales were $1,108 million compared with $929 million a year ago.

       "The company's operating results again were in line with expectations," said Barry W. Perry, chairman and chief executive officer. "Performance from new technologies and new served markets continued to contribute to earnings growth."

       Mr. Perry indicated that full-year 2004 results are still expected to show modest improvement versus the prior year, including the benefit from the tax agreement.

Second-Quarter Operating Results

      Operating earnings from Environmental Technologies increased 4% to $33 million, while sales rose 7% to $224 million. Higher revenues from mobile-source OEM markets were partly offset by lower diesel-retrofit sales following completion of last year's large Hong Kong program. Moderate earnings growth resulted primarily from certain mobile markets partly offset by absence of prior-year retrofit volume and unfavorable mix in light-duty vehicles.

      Operating earnings from Process Technologies declined 6% to $23 million. Sales rose 14% to $159 million. Solid earnings from petroleum refining catalysts and addititves were more than offset by continued lower results from most chemical-process markets.

       Operating earnings from Appearance and Performance Technologies were $24 million, compared with $19 million in last year's quarter, which included a charge of $7.8 million. Excluding the charge, earnings declined 10%. Sales rose 6% to $185 million. Results primarily reflected lower volumes of mineral-based products to the paper market.

       Operating earnings from Materials Services were $3 million, down modestly from a year ago. Sales were up 33% to $525 million.

       Engelhard Corporation is a surface and materials science company that develops technologies to improve customers' products and processes. A Fortune 500 company, Engelhard is a world-leading provider of technologies for environmental, process, appearance and performance applications. For more information, visit Engelhard on the Internet at www.engelhard.com.

       Forward-looking statements: This document contains forward-looking statements in management's comments. There are a number of factors that could cause Engelhard's actual results to vary materially from those projected in the forward-looking statements. For a more thorough discussion of these factors, please refer to page 25 of Engelhard's 2003 Form 10-K, dated March 11, 2004.

Engelhard Corporation
Condensed Consolidated Statements of Earnings
(Thousands, except per share data)
(Unaudited)

Had compensation cost for Engelhard’s stock option plans been determined based on the fair value at grant date consistent with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” (assuming SFAS No. 123 was adopted on its effective date of October 1995), Engelhard would have reported net earnings and diluted earnings per share as follows:

Engelhard Corporation
Business Segment Information
(Thousands)
(Unaudited)

(A)     — Includes a restructuring charge of $5.3 million ($3.5 million after tax or $0.03 per share) in 2003.

(B)     — Includes a restructuring charge of $2.6 million ($1.6 million after tax or $0.01 per share) in 2003.

(C)     — Includes a charge of $7.8 million ($4.8 million after tax or $0.04 per share) in 2003 related to lease commitments for idle facilities.

(D)     — Includes a royalty settlement gain of $28.4 million ($17.6 million after tax or $0.14 per share) and a Corporate restructuring charge of $0.8 million ($0.5 million after tax or less than $0.01 per share) in 2003.