30 July 2013 17:26 [Source: ICIS news]
HOUSTON (ICIS)--Occidental Petroleum expects that underlying third-quarter earnings in its OxyChem chemicals business will improve from the second quarter as demand should pick up, the company’s CFO said on Tuesday.
OxyChem would benefit from “higher seasonal demand and continued strong polyvinyl choride [PVC] sales into construction markets,” Cynthia Walker told analysts during Occidental’s second-quarter results conference call.
OxyChem’s core Q3 earnings should come in at about $170m (€128m), compared with $144m in the second quarter, she predicted.
By comparison, OxyChem’s Q2 earnings - after adjusting for a $131m pre-tax gain related to a divestment - were $15m lower than the first quarter, mainly because of lower caustic soda export volumes due to weak economic conditions in Europe, slowing demand in Asia, and reduced demand for alumina in South America, Walker added.
For the six months ended 30 June, chemical core earnings were $303m, compared with $378m for the same period in 2012, with the year-on-year decline primarily due to “higher energy and feedstock prices and continued weak export chlorinated organics pricing resulting from new organics production in ?xml:namespace>
During the conference call, CEO Stephen Chazen told analysts that Occidental Petroleum had presented “various options” for a strategic review and restructuring of Occidental’s overall business to the board of directors.
“We expect to have additional information regarding our plans towards the end of the year,” he said. He declined to disclose details.
It remains unclear if, or to what extent, the OxyChem business may be affected. An Occidental media spokesperson was not immediately available for additional comment.
($1 = €0.75)
Additional reporting by Franco Capaldo
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