) hit a new 52-week high of $122.74 on Jan 10 and eventually
closed at $121.69. The shares of this specialty chemicals company
have been on the rise since it reported solid third-quarter 2013
earnings on Nov 7.
The company's long-term estimated earnings per share (EPS) growth
rate is 6%. Average volume of shares traded over the last three
months was roughly 338.5K.
Westlake posted strong third-quarter 2013 results on healthy
gains from higher pricing and lower feedstock costs, stemming
from North American shale gas production. The company's earnings
for the quarter climbed to $2.54 per share from $1.30 per share a
year ago, outshining the Zacks Consensus Estimate of $2.21.
Profit zoomed roughly 96% year over year to $170.3 million.
Revenues rose roughly 22% year over year to around $1,004 million
in the quarter, beating the Zacks Consensus Estimate of $935
million. Westlake benefited from increased sales volumes for
styrene and caustic, higher selling prices and contributions from
its specialty PVC pipe business (acquired in May 2013) in the
Westlake had acquired CertainTeed Corporation's Pipe and
Foundation Group (PFG) for about $175 million in cash on May 1.
The acquisition is a strategic fit for Westlake, as it enhances
the company's North American Pipe and building products portfolio
by adding specialty product lines and supporting technology.
Westlake also saw higher olefins and vinyls integrated product
margins in the third quarter, helped by higher selling prices for
key products. Increased ethylene production at the company's Lake
Charles complex also contributed to olefins margin expansion.
Sales from Westlake's Olefins segment jumped roughly 26% year
over year to $679.3 million in the third quarter. The Vinyls
segment recorded sales rose around 15% year over year to $324.8
million in the reported quarter.
In Aug 2013, Westlake also announced a 20% hike in its quarterly
dividend to $0.225 per share from the previous payout of $0.1875
Westlake, which currently carries a Zacks Rank #2 (Buy), expects
continued cost benefits from North American shale gas production.
The company continues to invest to capture this cost advantage.
Other Stocks to Consider
Other companies in the specialty chemical space with favorable
Zacks Rank are
A. Schulman, Inc.
). While Chemtura carries a Zacks Rank #1 (Strong Buy), A.
Schulman and PolyOne hold a Zacks Rank #2 (Buy).
CHEMTURA CORP (CHMT): Free Stock Analysis
POLYONE CORP (POL): Free Stock Analysis
SCHULMAN(A) INC (SHLM): Free Stock Analysis
WESTLAKE CHEM (WLK): Free Stock Analysis
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