LyondellBasell Falls as Profit Disappoints Some Investors

LyondellBasell Industries NV (LYB), the world’s biggest maker of polypropylene resins, fell the most in eight weeks after first-quarter earnings disappointed some investors and amid speculation of higher raw-materials costs.

LyondellBasell slid 5.9 percent to $43.04 at 1:09 p.m. in New York. The shares earlier dropped as much as 6.8 percent, the biggest intraday decline since March 6. Before today, the stock was up 42 percent for the year.

Profit excluding asset-impairment costs and other items was $1.07, topping the $1.04 average estimate of 13 analysts surveyed by Bloomberg.

“Investors wanted a blockbuster first quarter,” Hassan Ahmed, a New York-based analyst at Alembic Global Advisors who recommends buying the shares, said today in a telephone interview. “It’s clearly the buy side that is disappointed.”

Net income fell to $1.04 a share from $1.15 a year earlier after prices rose for oil, which is used to make chemicals in Europe, Rotterdam-based LyondellBasell said in a statement.

Some investors are concerned that ethane, a raw material used to make ethylene in the U.S., will cost more in the second half as demand increases following the completion of first-half maintenance projects, Ahmed said. LyondellBasell is starting the second of two ethylene units in Channelview, Texas, after completing maintenance, Chief Executive Officer James Gallogly said today on a conference call.

Ethane may rise in the third quarter followed by lower prices in the fourth quarter extending through 2013 and 2014, Gallogly said.

First-quarter net income fell 9.5 percent to $600 million from $663 million. Sales declined 3 percent to $11.9 billion, matching the average estimate of 11 estimates.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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