Specialty chemicals company
Westlake Chemical Corp.
) first-quarter 2014 earnings of $1.18 per share were above 92
cents per share earned in the year-ago quarter. The results also
exceeded the Zacks Consensus Estimate of $1.13, reflecting a
positive surprise of around 4.4%.
The company posted profit of $158 million in the reported
quarter, surging roughly 28% from $123.3 million recorded in the
prior-year quarter. The improvement came despite the unfavorable
impact from elevated propane costs, severe winter weather
conditions and the planned maintenance turnaround at Calvert City
for the ethylene plant's feedstock conversion and expansion in
the reported quarter.
Westlake saw higher olefins volumes and improved integrated
product margins in the quarter, as higher selling prices more
than offset the increase in feedstock and energy costs as
compared with the last-year quarter.
Revenues came in at $1,027.7 million in the quarter, up
roughly 19% from $864.6 million registered a year ago. It also
surpassed the Zacks Consensus Estimate of $964 million. Westlake
benefited from increased sales volumes for polyethylene and
ethylene, higher selling prices for key products and
contributions from its specialty PVC pipe business (acquired in
May 2013) in the quarter.
The Olefins segment's income from operations of $272.3 million
zoomed 69% from $161.1 million registered a year ago. The results
were positively impacted by higher olefin integrated product
margins, higher polyethylene and ethylene sales volumes and
improved production rates for key products.
Westlake reported an operating loss of $21.1 million for the
Vinyls segment in the reported quarter, a decrease of $64.8
million from the operating income of $43.7 million in the
prior-year quarter. The decrease was mainly attributable to lost
sales, lower production rates, unabsorbed fixed manufacturing
expense of $16.9 million, other costs related to the planned
maintenance turnaround of the Calvert City production facilities
and other planned maintenance activities. The segment was also
negatively impacted by severe winter weather and significantly
higher propane costs.
Westlake had cash and cash equivalents of $532.6 million as of
Mar 31, 2014, down 31.5% from $777.9 million as of Mar 31, 2013.
Long-term debt stood at $763.9 million as of Mar 31, 2014, flat
on a year-over-year basis.
Net cash provided by operating activities was $212.5 million
in the reported quarter compared with $116.3 million in the
prior-year quarter. Capital expenditures were $110.7 million for
the first quarter of 2014.
Westlake currently maintains a Zacks Rank #2 (Buy).
Other companies in the chemical-plastics space with a
favorable Zacks Rank are
A. Schulman, Inc.
Kraton Performance Polymers Inc.
). While A.Schulman retains a Zacks Rank #1 (Strong Buy), both
Kraton and PolyOne hold a Zacks Rank #2 (Buy).
KRATON PERFORM (KRA): Free Stock Analysis
POLYONE CORP (POL): Free Stock Analysis
SCHULMAN(A) INC (SHLM): Free Stock Analysis
WESTLAKE CHEM (WLK): Free Stock Analysis
To read this article on Zacks.com click here.