LyondellBasell Falls as Earnings Trail Analyst Estimates

- LyondellBasell Industries NV (LYB), the largest producer of polypropylene, fell the most in four months after third-quarter profit fell short of estimates on narrowing oil-refining margins and rising propane costs.

LyondellBasell dropped 2 percent to $74.02 at 11:28 a.m. in New York, after earlier slipping as much as 4 percent, the most intraday since June 24. The shares have gained 30 percent this year.

Net income rose to $1.50 a share from $1.46 a year earlier, the London-based company said in a statement today. Excluding a loss from discontinued operations, profit was $1.51 a share, trailing the $1.59 average of 18 analysts’ estimates compiled by Bloomberg. Revenue dropped 1.1 percent to $11.2 billion, less than the $11.4 billion average estimate.

“Refining continued to be a headwind for the company amid realization of weak refining spreads,” Don Carson, a New York-based analyst at Susquehanna Financial Group who recommends buying the shares, said in a note today.

Earnings before interest, taxes, depreciation and amortization at LyondellBasell’s refining unit dropped 95 percent to $8 million because of narrower margins, maintenance and spending on renewable fuel credits, the company said. Ebitda dropped by $60 million at the oxyfuels segment as sales volumes and margins declined.

The biggest disappointment was in the U.S. olefins unit, which makes plastics, where Ebitda fell 12 percent from the prior quarter to $841 million, due to plant maintenance and higher propane costs, Carson said.

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