Westlake Chemical posts third-quarter gains

HOUSTON (Nov. 5, 4:30 p.m. ET) -- Higher North American polyethylene prices helped Westlake Chemical Corp. post solid financial results in the third quarter.

Houston-based Westlake reported Nov. 3 that its third-quarter profit grew almost 9 percent vs. the year-ago quarter to almost $30 million. The gain occurred even as Westlake’s third-quarter sales fell 41 percent to about $630 million.

Operating income in Westlake’s olefins unit — including PE — more than tripled in the same comparison, approaching $62 million. Again, sales told a different story, with the unit’s revenue falling 39 percent to about $441 million.

“Olefins segment operating margins improved in the third quarter, as increases in polyethylene prices outpaced the increase in feedstock costs,” Westlake president and chief executive officer Albert Chao said in a news release. “Gas-based ethylene producers, like Westlake, continue to have a cost advantage over naphtha-based producers.”

The picture wasn’t as sunny in Westlake’s vinyls unit – including PVC – which saw a third-quarter operating loss of about $8 million as sales fell 45 percent to $192 million.

On Wall Street, Westlake’s per-share stock price bottomed out at $10.40 in early March, but was near $26 in late trading Nov. 5 — and was up more than 5 percent since the release of the third-quarter report.

Westlake ranks as North America’s third-largest low density PE maker, based on estimated 2008 sales, with a market share of 16 percent. The firm holds down the #5 spot in regional sales of both linear LDPE and PVC.

(You need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Fields marked with * are required.