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Westlake Chemical net income drops in Q1
01 May '08
3 min read
The company decided to permanently close the Pawling, New York facility and consolidate manufacturing of window and door components in Calgary, Canada. Asset impairments, severance and other costs recorded in the first quarter of 2008, related to this closure, were approximately $2.5 million.
First quarter 2008 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 companies in the industry.
First quarter 2008 net income decreased $13.4 million, or $0.21 per diluted share, from the $18.8 million net income, or $0.29 per diluted share, reported in the fourth quarter of 2007. First quarter 2008 income from operations decreased $6.1 million from the $20.0 million reported in the fourth quarter of 2007, while net sales increased by $64.5 million from the $850.6 million reported in the fourth quarter of 2007.
The increase in sales was largely due to higher selling prices for polyethylene, PVC resin, PVC pipe and caustic and higher sales volumes for PVC resin. These increases were partially offset by lower sales volumes for PVC pipe resulting from the continued weakness in the construction markets and seasonal slowdowns. Income from operations declined in the first quarter of 2008 as compared to the fourth quarter of 2007 primarily due to higher feedstock and energy costs.
The first quarter was also negatively impacted by the turnaround of the styrene plant in Lake Charles and the closure of the Pawling facility. These decreases were partially offset by higher sales prices for ethylene, polyethylene, PVC resin and PVC pipe. The fourth quarter 2007 net income was favorably impacted by a tax benefit of $8.0 million, or $0.12 per diluted share, related to the reorganization of several subsidiaries.
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First quarter 2008 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 companies in the industry.
First quarter 2008 net income decreased $13.4 million, or $0.21 per diluted share, from the $18.8 million net income, or $0.29 per diluted share, reported in the fourth quarter of 2007. First quarter 2008 income from operations decreased $6.1 million from the $20.0 million reported in the fourth quarter of 2007, while net sales increased by $64.5 million from the $850.6 million reported in the fourth quarter of 2007.
The increase in sales was largely due to higher selling prices for polyethylene, PVC resin, PVC pipe and caustic and higher sales volumes for PVC resin. These increases were partially offset by lower sales volumes for PVC pipe resulting from the continued weakness in the construction markets and seasonal slowdowns. Income from operations declined in the first quarter of 2008 as compared to the fourth quarter of 2007 primarily due to higher feedstock and energy costs.
The first quarter was also negatively impacted by the turnaround of the styrene plant in Lake Charles and the closure of the Pawling facility. These decreases were partially offset by higher sales prices for ethylene, polyethylene, PVC resin and PVC pipe. The fourth quarter 2007 net income was favorably impacted by a tax benefit of $8.0 million, or $0.12 per diluted share, related to the reorganization of several subsidiaries.
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Westlake Chemical Corporation
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