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Westlake Chemical Q2 net income surges 26%
31
Jul '13
Westlake Chemical Corporation reported record net income of $145.8 million, or $2.17 per diluted share, on net sales of $939.0 million for the quarter ended June 30, 2013.

This represents an increase in net income of $30.3 million, or $0.45 per diluted share, compared to the quarter ended June 30, 2012 net income of $115.5 million, or $1.72 per diluted share, on net sales of $914.0 million.

Net sales for the second quarter of 2013 increased by $25.0 million compared to net sales for the second quarter of 2012, mainly attributable to higher sales volumes for building products, PVC resin and caustic, partially offset by lower feedstock and ethylene sales volumes.

Income from operations was $235.2 million for the second quarter of 2013 as compared to $171.0 million for the second quarter of 2012. Income from operations for the second quarter of 2013 benefited primarily from improved olefins and vinyls integrated product margins predominantly due to lower feedstock costs as compared to the second quarter of 2012.

Industry ethane prices declined 32.4% and industry propane prices declined 6.5% in the second quarter of 2013 as compared to the second quarter of 2012. Income from operations for the second quarter of 2013 was negatively impacted by non-recurring costs of $5.7 million, or $0.05 per diluted share, after tax related to the Company's acquisition of CertainTeed Corporation's pipe and foundation business ("PFG"), which closed in the second quarter of 2013.

Second quarter 2013 net income of $145.8 million, or $2.17 per diluted share, increased from the $123.3 million, or $1.84 per diluted share, reported by the Company in the first quarter of 2013. Second quarter 2013 sales of $939.0 million increased $74.4 million compared to sales of $864.6 million in the first quarter of 2013.

The increase in sales was largely due to higher sales volumes for PVC resin, building products and caustic. Second quarter 2013 income from operations of $235.2 million increased by $41.2 million over the income from operations in the first quarter of 2013 of $194.0 million.

Income from operations in the second quarter of 2013 benefited from higher sales prices for polyethylene and PVC resin and higher sales volumes for most of our major vinyls products as compared to the first quarter of 2013. Income from operations for the first quarter of 2013 was negatively impacted by the lost production and costs associated with the turnaround and expansion of one of our Lake Charles ethylene units.

For the six months ended June 30, 2013, net income was $269.2 million, or $4.01 per diluted share, on net sales of $1,803.7 million. This represents an increase in net income of $65.9 million, or $0.98 per diluted share, from the six months ended June 30, 2012 net income of $203.3 million, or $3.03 per diluted share, on net sales of $1,948.8 million.

Net sales for the six months ended June 30, 2013 decreased by $145.1 million compared to the prior year period mainly due to lower feedstock, ethylene and ethylene co-products sales volumes, partially offset by higher sales volumes for PVC resin and building products and higher caustic sales prices and sales volume.

Income from operations was $429.3 million for the six months ended June 30, 2013 as compared to $316.6 million for the six months ended June 30, 2012.

The increase in income from operations was primarily attributable to higher olefins and vinyls integrated product margins as compared to the prior year period, predominantly due to a significant decrease in feedstock costs as industry ethane prices decreased 45.4% and industry propane prices decreased 20.8% during the first six months of 2013 as compared to the first six months of 2012.

Westlake Chemical

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