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LyondellBasell reports widening polymer margins

07.25.2014  | 

“Integrated polyethylene margins in the US were up as much as 4 cents a pound, so that’s a big positive,” said Hassan Ahmed, a New York-based analyst at Alembic Global Advisors.

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By JACK KASKEY
Bloomberg

LyondellBasell Industries, the world’s biggest maker of polypropylene plastic, posted second-quarter earnings that topped analysts’ estimates as margins widened on higher prices.

Net income was $2.23/share, compared with $1.61 a year earlier, London-based LyondellBasell said in a statement Friday. Income from continuing operations was $2.22, which exceeded the $1.92 average estimate of 18 analysts compiled by Bloomberg. Sales were $12.1 billion, compared with $11.1 billion a year earlier, beating the $11.5 billion average estimate.

CEO Jim Gallogly is expanding LyondellBasell’s US chemical plants as hydraulic fracturing in shale rock formations boosts supplies of natural gas and cuts raw-material costs. Polypropylene, used in bottle caps and carpets, and polyethylene, used in plastic bags, is mostly made from gas in North America.

“Integrated polyethylene margins in the US were up as much as 4 cents a pound, so that’s a big positive,” Hassan Ahmed, a New York-based analyst at Alembic Global Advisors who recommends buying the shares, said yesterday by phone.

Operating earnings at LyondellBasell’s Americas olefins unit, which makes polyethylene and polypropylene, rose 3% on higher product prices, it said.

LyondellBasell moved its tax residence to the UK from the Netherlands last year to avoid payments on dividends and gain flexibility in managing its cash. LyondellBasell is run from Houston and remains incorporated in Rotterdam.



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