Westlake President pleased with Olefins segment performance
06 Nov '07
3 min read
Westlake Chemical Corporation reported net income of $38.3 million, or $0.59 per diluted share, for the third quarter of 2007. This represents a decrease from the third quarter of 2006 net income of $61.7 million, or $0.95 per diluted share. Sales for the third quarter of 2007 were $840.2 million and income from operations for the third quarter of 2007 was $59.8 million.
This compares with net sales of $672.4 million and income from operations of $87.0 million in the third quarter 2006. The increase in sales is the result of higher polyethylene sales volumes attributable to the November 30, 2006 acquisition of Eastman Chemical's polyethylene business in Longview, Texas.
The decline in income from operations was primarily due to weakness in the Vinyls segment, particularly the downstream products businesses, which was impacted by the slowdown in the residential construction market. Margins remained at low levels primarily due to rising feedstock costs and the vinyls industry's inability to raise prices to cover these cost increases.
Vinyls segment third quarter 2007 income from operations was also negatively impacted by $6.7 million for the settlement of litigation with Goodrich Corporation and PolyOne Corporation and associated legal expenses related to past environmental issues at the Calvert City facilities.
The decline in income from operations was partially offset by an increase in income from operations for the Olefins segment. TheOlefins segment benefited from the earnings from the Longview facilities, which were acquired in November 2006. The third quarter 2006 was adversely impacted by an unscheduled outage at one of the ethylene units in Lake Charles, Louisiana resulting from mechanical problems with a compressor that required extended maintenance.
marketing@alchempro.com
