Westlake Chemical third quarter earnings up 8%

04 Nov '11

4 min read

Westlake Chemical Corporation reported net income for the three months ended September 30, 2011 of $67.9 million, or $1.01 per diluted share, on sales of $968.4 million. This represents an increase in net income of $5.2 million from the quarter ended September 30, 2010 net income of $62.7 million, or $0.95 per diluted share, on sales of $779.7 million.

Sales for the third quarter of 2011 increased $188.7 million compared to the third quarter of 2010 driven primarily by higher sales prices for all of the Company's major products, partially offset by lower building products sales volume.

Income from operations was $117.3 million for the third quarter of 2011 as compared to $107.3 million for the third quarter of 2010. Income from operations benefited primarily from higher PVC resin, PVC pipe and caustic margins, which was partially offset by lower olefins integrated product margins.

Third quarter 2011 earnings of $67.9 million, or $1.01 per diluted share, on sales of $968.4 million were lower than the earnings of $81.0 million, or $1.21 per diluted share, on sales of $925.0 million, reported by the Company in the second quarter of 2011.

Third quarter 2011 income from operations of $117.3 million decreased $21.1 million compared to income from operations in the second quarter of 2011 of $138.4 million. The decrease in income from operations was primarily due to lower olefins integrated product margins resulting from lower sales prices for polyethylene and higher feedstock costs, partially offset by improved Vinyls segment earnings.

Albert Chao, President and Chief Executive Officer, said, "As we celebrate Westlake's 25th anniversary, we are pleased to report year to date earnings have already exceeded the highest full-year earnings in the Company's history.

Vinyls margins have improved over last year as a result of higher prices for PVC resin and PVC pipe and improved export demand for PVC resin. Our natural gas-based ethylene production continues to have a cost advantage over naphtha-based feedstock, which has benefited both our Vinyls and Olefins segments.

We believe the benefits of North American shale gas production will keep North American natural gas-based ethylene producers globally competitive for many years to come."

Net income for the nine months ended September 30, 2011 was $232.5 million, or $3.48 per diluted share, on net sales of $2,760.7 million. This represents an increase in net income of $95.2 million, or $1.41 per diluted share, from the nine months ended September 30, 2010 net income of $137.3 million, or $2.07 per diluted share.

Net sales for the first nine months of 2011 increased $384.3 million compared to the first nine months of 2010 net sales of $2,376.4 million mainly due to higher sales prices for all our major products and higher sales volume for PVC resin, partially offset by lower building products sales volume.

Income from operations was $396.3 million for the nine months ended September 30, 2011 as compared to $241.3 million for the nine months ended September 30, 2010. Income from operations for the nine months ended September 30, 2011 benefited primarily from improved olefins integrated product margins, higher PVC resin and PVC pipe sales prices, higher PVC resin sales volume and improved caustic margins compared to the prior year period, partially offset by higher feedstock costs.

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