Westlake Chemical Corporation reported net income of $61.7 million, or $0.95 per diluted share, for the third quarter of 2006, an increase of 42 percent from the third quarter of 2005 net income of $43.5 million, or $0.67 per diluted share. Income from operations was $87.0 million on net sales of $672.4 million for the third quarter of 2006.
This compares favorably with third quarter 2005 income from operations of $70.1 million on net sales of $605.4 million.
The improvement in income from operations was primarily the result of increased selling prices, which outpaced higher feedstock costs, and improved feedstock trading results.
The utilization of first-in, first-out (FIFO) inventory accounting as compared with utilizing the last-in, first-out (LIFO) method used by some companies in the industry was slightly favorable in the third quarter.
Compared to the second quarter of 2006, net income decreased $5.5 million, or $0.08 per diluted share, in the third quarter of 2006. However, third quarter 2006 net sales were $3.1 million higher than the $669.3 million reported in the second quarter of 2006.
Third quarter 2006 income from operations decreased $19.9 million from the income from operations of $106.9 million reported in the second quarter of 2006.
The decrease in net income and income from operations in the third quarter of 2006 as compared to the second quarter of 2006 was primarily due to the unscheduled outage atthe ethylene unit in Lake Charles, Louisiana.
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