Westlake Chemical Corp. (WLK), the U.S. plastics maker controlled by the billionaire Chao family, gained the most in six months after posting first-quarter earnings that exceeded analysts’ estimates as margins widened on price gains.
Westlake rose 4.9 percent to $86.50 at 9:16 a.m. in New York. The shares earlier rose as much as 6.1 percent, the most intraday since Oct. 16.
Net income rose to a record $123.3 million, or $1.84 a share, from $87.8 million, or $1.31, a year earlier, Houston- based Westlake said today in a statement. That tops the $1.28 average of eight analysts’ estimates compiled by Bloomberg. Sales of $864.6 million exceeded the average estimate of $856.8 million.
Chief Executive Officer Albert Chao, whose family owns 69 percent of Westlake, is boosting production along the U.S. Gulf Coast as hydraulic fracturing, known as fracking, cuts costs for natural gas, a key raw material for plastics. Costs for raw materials and energy fell in the quarter while prices rose for products such as PVC pipe.
“Pricing initiatives for polyethylene and PVC appear to have also contributed meaningfully during the quarter, leading to improved year-over-year and sequential margin improvement,” Don Carson, a New York-based analyst at Susquehanna Financial Group who rates the shares neutral, said in a report today.
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