Houston, Texas based chemical producer Westlake Chemical Corporation reported net income of $48.5 million, or $0.74 per diluted share, and income from operations of $82.8 million on net sales of $580.7 million for the second quarter of 2005. This compares favorably with second quarter 2004 net income of $34.4 million, or $0.69 per diluted share, and income from operations of $65.9 million on net sales of $449.4 million.
The improvement in net sales and income from operations was primarily the result of increased sales volumes and increased selling prices, which outpaced higher feedstock and energy costs. PVC pipe sales volume increased driven by strong end-markets and by the August 2004 acquisition of the assets of Bristolpipe Corporation. Westlake Chemical uses the first-in, first-out (FIFO) method for valuing inventory. The FIFO method had a minimal negative impact on its second quarter results as compared with utilizing the last-in, first-out (LIFO) method used by some of their competitors.
Second quarter 2005 net income decreased $12.6 million, or $0.20 per diluted share from the $61.1 million net income, or $0.94 per diluted share, reported in the first quarter of 2005. Second quarter 2005 income from operations and net sales decreased $18.9 million and $37.9 million respectively, from the income from operations of $101.7 million and net sales of $618.6 million reported in the first quarter of 2005. These decreases were due primarily to lower selling prices for ethylene and polyethylene and higher raw material costs, which were partially offset by higher sales volumes in both segments and higher selling prices in our Vinyls segment.
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