Westlake Chemical Corporation reported net income of $19.7 million, or $0.30 per diluted share, for the first quarter of 2007. This represents a decrease from the first quarter of 2006 net income of $51.3 million, or $0.79 per diluted share.
The first quarter of 2006 net income was negatively impacted by an after tax charge of $16.3 million, or $0.25 per diluted share, related to the early retirement of debt.
Sales for the first quarter of 2007 were $718.8 million, the highest in the history of the Company. Contributing to the record quarterly sales volume was the November 30, 2006 acquisition of Eastman Chemical's polyethylene business in Longview, Texas. Income from operations for the first quarter of 2007 was $32.7 million.
This compares with first quarter 2006 income from operations of $110.9 million on net sales of $618.8 million. The decrease in income from operations is due primarily to lower selling prices for both olefins and vinyls products and higher feedstock costs.
These reductions were partially offset by higher sales volumes for most of the Company's products. The first quarter of 2006 benefited from strong market conditions that existed for a period of time following Hurricanes Katrina and Rita.
First quarter 2007 results were minimally impacted by the utilization of the first-in, first-out (FIFO) inventory accounting method as compared with utilizing the last-in, first-out (LIFO) method used by some companiesin the industry. By comparison, first quarter 2006 results were negatively impacted from using the FIFO method due to falling feedstock costs after the increases that had occurred as a result of Hurricanes Katrina and Rita.
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