Specialty chemicals company
Westlake Chemical Corp.
) second-quarter 2013 earnings of $2.17 per share topped the
Zacks Consensus Estimate of $1.95 and exceeded $1.72 per share
earned in the year-ago quarter. Profit shot up 26% year over year
to $145.8 million as the company gained from lower cost
natural-gas based ethylene production stemming from North
American shale gas and oil production.
Revenues rose roughly 3% year over year to $939 million in the
quarter, beating the Zacks Consensus Estimate of $932 million.
Westlake benefited from increased sales volumes for PVC resin,
building products and caustic in the quarter, which offset lower
feedstock and ethylene sales volumes.
Westlake saw higher olefins and vinyls integrated product margins
in the quarter, helped by lower feedstock costs. It also gained
from sequentially higher sales prices for polyethylene and PVC
resin and increased volumes for most of its major vinyls
Sales from the Olefins segment fell roughly 7% year over year to
$623.3 million. Income from operations jumped 20% year over year
to $187.7 million in the quarter on higher olefins integrated
product margins owing to lower feedstock costs.
The Vinyls segment recorded sales of $315.7 million in the
reported quarter, a 31% year-over-year surge. Income from
operations more than doubled year over year to $52.9 million,
attributable to higher vinyls integrated product margins and
increased volumes for major products.
Westlake ended the quarter with cash and cash equivalents of
$625.5 million, down 44% year over year. Long-term debt stood at
$763.8 million, essentially flat on a year-over-year basis. Net
cash provided by operating activities was $255.5 million in the
first half of 2013, down 19% year over year. Capital expenditures
were $297.9 million for the period.
During the second quarter, Westlake closed its acquisition of
CertainTeed Corporation's Pipe and Foundation Group ("PFG") for
about $175 million in cash. The acquisition is a strategic fit
for Westlake as it enhanced the company's North American Pipe and
building products portfolio by adding specialty product lines and
Westlake currently retains a Zacks Rank #1 (Strong Buy).
Other companies in the specialty chemical space with favorabe
Zacks Rank are
KMG Chemicals Inc.
Sensient Technologies Corporation
). While Ferro retains a Zacks Rank #1 (Strong Buy), KMG
Chemicals and Sensient Technologies retain a Zacks Rank #2
FERRO CORP (FOE): Free Stock Analysis Report
KMG CHEMICALS (KMG): Free Stock Analysis
SENSIENT TECH (SXT): Free Stock Analysis
WESTLAKE CHEM (WLK): Free Stock Analysis
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