Westlake Chemical Corp. (WLK) Monday reported about 40 percent increase in first-quarter profit, despite lower revenues, benefited by olefins and vinyls product margins as feedstock and energy costs declined from last year. Earnings per share exceeded analysts' expectations, while revenues missed view.
For the first quarter, the company posted net income of $123.35 million or $1.84 per share, higher than $87.81 million or $1.31 per share in the prior-year quarter. On average, nine analysts polled by Thomson Reuters expected the company to earn $1.25 per share for the quarter. Analysts' estimates typically exclude special items.
Meanwhile, the manufacturer of basic chemicals, vinyls, polymers and fabricated building products, said its quarterly revenues declined to $864.65 million from $1.03 billion a year earlier. Analysts estimated revenues of $870.10 million for the quarter.
The company attributed the decline in revenues mainly to lower feedstock, ethylene and ethylene co-product sales volumes and lower sales prices for polyethylene and PVC resin.
Ethylene and ethylene co-product sales volumes were lower primarily due to the planned turnaround and expansion of one of its Lake Charles, Louisiana ethylene units, which lasted 74 days, the company said.
Cost of sales dropped to $636.84 million from $862.23 million a year earlier.
In the Olefins segment, margins improved mainly due to significantly lower feedstock and energy costs, which were only partially offset by lower sales prices. Vinyls segment also saw higher vinyls integrated product margins as a result of lower feedstock costs, compared to the first quarter of 2012.
Albert Chao, president and chief executive officer of the company said, "We continue to benefit from a globally advantaged energy and feedstock position resulting from North American shale gas and oil production."
WLK closed Friday's regular trading at $82.45 on the NYSE.
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