US Occidental sees Q2 chem profits at $80m on demand growth
29 April 2010 18:02 [Source: ICIS news]
HOUSTON (ICIS news)--Executives at Occidental Petroleum said on Thursday they expect second-quarter chemical earnings to be around $80m (€61m), still well short of the $115m achieved in the second quarter of 2009 but a dramatic improvement from the $30m profit just reported for the first quarter of 2010.
"Demand for caustic soda and vinyls is expected to continue to improve in both the US and the international markets," president and chief financial officer Stephen Chazen said.
Improving caustic soda pricing and low natural gas prices would contribute to margin improvement, Chazen told analysts on a conference call to discuss the first-quarter earnings.
Earlier, the company reported that its chemical business OxyChem's profits fell 82% to $30m in the first quarter from $169m a year earlier, mainly due to weak US housing and construction markets.
The decline occurred despite a 21% gain in sales to $956m.
"The significant margin erosion in 2009 carried over into the first quarter of this year," Chazen told the analysts.
OxyChem produces polyvinyl chloride (PVC) resins, chlorine, calcium chloride and caustic soda.
The company describes itself as the largest US merchant marketer of both chlorine and caustic soda, and the world’s largest producer of caustic potash and calcium chloride.
Overall, Occidental reported first-quarter net income of $1.06bn, up sharply from $368m in the year-earlier period due to higher crude oil and natural gas prices and higher volumes.
($1 = €0.76)
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