Westlake achieves highest earnings in 2011 in its history
Westlake Chemical Corporation reported net income for the three months ended December 31, 2011 of $26.4 million, or $0.40 per diluted share, compared to net income of $84.1 million, or $1.26 per diluted share, reported for the fourth quarter of 2010.
Net sales for the three months ended December 31, 2011 of $859.2 million increased $63.8 million compared to net sales of $795.4 million in the same period of 2010, primarily due to higher sales volumes for polyethylene, styrene and PVC resin and higher sales prices for building products and caustic, partially offset by lower building products sales volume.
Income from operations was $50.5 million for the fourth quarter of 2011 compared to $137.1 million for the fourth quarter of 2010. Fourth quarter of 2011 income from operations was lower primarily as a result of higher feedstock costs, which were only partially offset by higher building products and caustic sales prices.
Net sales in the fourth quarter of 2011 of $859.2 million decreased $109.2 million from net sales of $968.4 million in the third quarter of 2011, primarily as a result of lower sales prices for most of the Company's major products. Fourth quarter 2011 income from operations was $50.5 million as compared to $117.3 million reported for the third quarter of 2011, a decrease of $66.8 million.
Operating income in the fourth quarter of 2011 decreased compared to the third quarter of 2011 primarily as a result of lower polyethylene, PVC resin and building products sales prices and higher feedstock costs.
Albert Chao, President and Chief Executive Officer, said, "In 2011 we celebrated our 25th year in business and also achieved the highest earnings in Company history, as earnings grew by 17% driven largely by improved integrated vinyls margins. In addition, we announced expansion programs to increase both our chlorine and ethane-based ethylene capacity. We believe our integration strategy, coupled with our advantaged feedstock position due to increased U.S. shale gas production, will continue to improve our profitability in both our Olefins and Vinyls businesses."
For the year ended December 31, 2011, Westlake had net income of $259.0 million, or $3.87 per diluted share, on net sales of $3,619.8 million. This represents an increase in net income of $37.6 million, or $0.53 per diluted share, from 2010 net income of $221.4 million, or $3.34 per diluted share, on net sales of $3,171.8 million in 2010. Net sales in 2011 increased $448.0 million over net sales in 2010 primarily 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 $446.8 million for the year ended December 31, 2011 as compared to $378.4 million for 2010, an increase of $68.4 million. Income from operations benefited primarily from improved caustic margins, higher PVC resin and building products sales prices and higher PVC resin sales volume as compared to 2010, partially offset by higher feedstock costs.