Plastic manufacturer A. Schulman Inc. reported its profit almost halved in its latest quarter as costs tied to an investigation weighed on the results, which sharply missed Wall Street expectations.

Schulman discovered quality reporting issues affecting certain product lines at two former HGGC Citadel Plastics Holdings manufacturing facilities that were once part of Lucent Polymers, which was acquired by Schulman in March.

"Our bottom line was significantly impacted by the costs incurred during the investigation and the ongoing resolution process of the Lucent quality reporting matter," said Chief Financial Officer Joseph Levanduski.

Still, he reaffirmed the company's guidance for the year.

The Ohio company, which does most of its business abroad and has been hit hard by falling demand in Europe, has also been hurt by a stronger U.S. dollar. In the latest period, currency conversions lowered revenue by about $62 million, or 10% of sales, Schulman said.

Overall, for the quarter ended Nov. 30, Schulman reported a profit of $7.1 million, or 18 cents a share, compared with $13.2 million, or 45 cents, a year earlier. Mr. Levanduski said results were dented $4.9 million, or 12 cents a share, by investigation costs. Excluding restructuring- and acquisition-related costs and other items, profit fell to 50 cents from 63 cents a share a year earlier.

Revenue rose 5.6% to $649.2 million.

Analysts had projected a profit of 61 cents a share on $673 million in revenue, according to Thomson Reuters.

In the latest period, revenue from Europe, the Middle East and Africa fell 13% to $328.1 million, with currency conversion lowering revenue by $44.2 million. Sales in U.S. and Canada, meanwhile, shot up 23% to $178.3 million, largely due to the Citadel acquisition; excluding the acquisition, revenue fell 18%.

Shares of Schulman, which have dropped 15% over the past 12 months, were down nearly 5% in early trading on Monday.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

January 11, 2016 10:05 ET (15:05 GMT)