Tue, Nov. 3, 2:31 PM
- Westlake Chemical (WLK +4.2%) posts solid gains after recording better than expected Q3 earnings despite weakening worldwide product demand.
- WLK’s Q3 net sales fell slightly Y/Y to $1.19B from $1.25B, hurt by reduced sales prices and lower sales volumes for most of its major products; WLK says it also had several plant outages for maintenance during the quarter but enjoyed stronger production rates at Louisiana and Kentucky plants.
- WLK says Q3 operating income in the olefins segment fell to $196.7M from $259.3M in the year-ago quarter, while operating income at the vinyls segment rose to $67.8M from $59.4M a year ago.
- In today's earnings conference call, CFO Steve Bender said WLK is on track to add 250M lbs./year of ethylene production capacity by the end of June as part of a ~$350M expansion project at its Lake Charles, La., complex.
Tue, Oct. 27, 10:19 AM
- Westlake Chemical (WLK -3.6%) is downgraded to Sell from Neutral with a $58 price target, down from $68, at UBS, which thinks upside September quarter results at Celanese (CE -0.5%), Dow Chemical (DOW +0.1%) and LyondellBasell (LYB -0.8%) may have temporarily driven recent strength in the sector.
- As the market becomes more balanced, UBS believes the potential for lower polyethylene prices is not yet fully priced in, and it sees downside risks to WLK's earnings and stock price.
Thu, Sep. 24, 5:37 PM
Mon, Sep. 21, 12:42 PM
- Petrochemical stocks shoot higher after a senior IRS official says the companies may be eligible for tax-exempt status, as the agency is reconsidering an earlier proposal that would have prevented the companies from converting into MLPs.
- A favorable IRS ruling for Westlake Chemical (WLK +5.2%) in 2012 fueled speculation that the MLP structure long popular among pipeline operators could be utilized by chemical makers, but the IRS in May proposed new rules that said petrochemical production would not qualify for MLP status unless it was part of a larger refining operation.
- WLK and Westlake Chemical Partners (WLKP +8.4%) are surging today; also rising are peers including Eastman Chemical (EMN +2.2%), Dow Chemical (DOW +1.5%), LyondellBasel(LYB +1.2%) and PolyOne (POL +1.8%), which each have chemical businesses that could be candidates for an MLP.
Wed, May 6, 11:18 AM
- The big drop this morning in Axiall (AXLL -9.4%) is attributed to comments on the company's conference call discussing yesterday's IRS ruling on publicly traded partnerships.
- AXLL says it is reviewing the IRS ruling but does not yet have an update on its private-letter ruling or the ultimate outcome of the rule-making process (Briefing.com).
- Yesterday, the IRS proposed new rules that would bar chemical manufacturers from forming MLPs; Westlake Chemical Partners (WLKP -14.2%) also is slammed for a second straight day, but WLK +2.4%.
Mon, Mar. 23, 12:50 PM
- Olin (OLN -3.8%) is downgraded to Sell from Neutral with a $25 price target at UBS, which says the sum of the parts argument for OLN following the Vista Outdoor spin is less compelling the higher the stock moves, and the firm believes channel inventory declines have not bottomed yet.
- While OLN made positive comments about the potential for a chlorine/caustic recovery on its Q4 earnings call, the sentiment was not echoed by competitors Axiall (AXLL -1.2%) and Westlake (WLK +0.5%), and Dow Chemical (DOW +0.1%) is selling its operations partly because of depressed results.
- UBS views chlor-alkali as a shale gas advantaged business, where supply has increased in recent years, plus the natural gas advantage has declined with the fall in oil prices.
Sep. 25, 2014, 2:08 PM
- Dow Chemical (DOW -0.4%) has begun the process of selling its epoxy and chlorine businesses, and has hired Goldman Sachs and Barclays to manage the sale, Reuters reports.
- The combined epoxy and chlorine businesses have annual EBITDA of close to $500M, and initial estimates place their combined value at $3.5B-$4B.
- Logical buyers, according to the report, could include companies in the sector such as Axiall (AXLL -2.3%) and Westlake Chemical (WLK -2.2%), as well as P-E firms experienced in chemicals such as Apollo Global (APO -1.5%).
May 5, 2014, 5:40 PM
Apr. 29, 2014, 12:46 PM
Apr. 29, 2014, 12:43 PM
- Westlake Chemical (WLK +12.2%) surges on news is spinning out a newly formed MLP subsidiary to operate, acquire and develop ethylene production facilities.
- With the spinoff of the ethylene business, WLK says it will focus on more specialized chemicals since ethylene is a key petrochemical building block for more of the specialty chemicals it produces.
- In Westlake Chemical Partners’ IPO filing, the company says it intends to raise $272M in its IPO.
- The MLP may be worth ~$85/share, says an Alembic Global analyst, who says it also would retain assets for making ethylene-derived plastics, including polyethylene and polyvinyl chloride, which would boost valuation further.
Dec. 2, 2013, 2:24 PM
- Investors applaud Dow Chemical's (DOW +2.9%) move to explore a spinoff or sale of its commodity chemical business - part of its original founding business from the late 19th century - which could generate up to $3B; it's part of Dow’s ongoing efforts to shift toward higher-margin products and technologies.
- Dow already had divested itself of ~$700M YTD; CEO Andrew Liveris had said DOW was planning to dispose of up to $4B in assets over the coming 12-24 months, and the chlorine spinoff plan means an increase in that estimate.
- The move will help the stock price and valuation over the next six to 12 months, Argus says, since Dow has tended to have a slightly lower valuation because investors want to see less of a commodity company and more of a specialized one.
- North American chlor-alkali producers Axiall (AXLL +9.6%), Olin (OLN +7.5%) and Westlake Chemical (WLK +1.8%) are higher on Dow's plan to close 800K tons of caustic and chlorine capacity, which analysts see as a positive for merchant sellers of caustic as it offsets the new capacity from the Dow-Mitsui joint venture.
Sep. 11, 2013, 2:18 PM
- Westlake Chemical (WLK -4%) shares are slammed after a downgrade to Neutral from Overweight at J.P. Morgan, which says year-ahead capital appreciation potential appears more limited.
- The firm also points to commodity trends, particularly in the vinyls chain, that are shaping up unfavorably and which may weigh down shares; caustic soda prices in the export market decreased $45/short ton in August, and the decreases likely will move the domestic contract market lower.
- Q4 also tends to be a period of weaker demand in PVC, and PVC prices may drop a few cents per pound as business for 2014 is re-priced, the firm adds.
Aug. 2, 2013, 2:00 PM
- Westlake Chemical (WLK -1.3%) comments on a recent complaint filed by Eastman Chemical (EMN -0.7%) with the Texas Railroad Commission regarding its pipeline that transports ethylene between Mont Belvieu and Longview, Texas.
- Both WLK and EMN have operating facilities in Longview, and Eastman contends that recent changes made by WLK to the pipeline tariff and the terms and conditions of the pipeline usage, cost and service, were made to delay the divesture of some of EMN's ethylene cracking units and would also impact its production capacity in the region.
- WLK doesn't agree, saying the changes made to the pipeline tariff were made in accordance with standard practices and reflect market conditions and were in no way intended to impact EMN's operation of its facilities in Longview nor, to delay divesture efforts.
Jun. 13, 2013, 10:52 AMWilliams Cos. (WMB -2.7%) sinks on word of a major explosion and fire at its olefins chemical plant in Geismar, La. Local reports say there are injuries at the facility. The plant produces ~1.3B lbs./year of ethylene and 90M lbs./year of polymer grade propylene. Westlake Chemicals (WLK +3.5%), whose shares are spiking on the news, is seen as a beneficiary of the event. | Jun. 13, 2013, 10:52 AM | 2 Comments
Apr. 12, 2013, 5:53 PM
Oct. 16, 2012, 2:33 PMLyondellBasell (LYB +5.7%) extends yesterday's gains sparked by a Barron's report that the hedge fund favorite was named as one of the chemical companies with most upside potential. But chemical names are strong across the board today, perhaps from speculation that a regulatory ruling could open up a move to an MLP structure: WLK +7.7%, DOW +5.3%, HUN +3%. | Oct. 16, 2012, 2:33 PM | 2 Comments
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