Income · Stocks to Consider and Updates

LyondellBasell Profits and Revenue Rise

Netherlands’s LyondellBasell Industries N.V (NYSE: LYB – $86.03) reported a 5.4% rise in third-quarter profit as revenue increased. The chemicals and oil refining company earned a $1.11 billion, or $2.85 a share, compared with $1.06 billion, or $2.67, for the same period last year. Analysts were predicting $2.70. Sales rose to $10.16 billion from $8.52 billion and also exceeded Street expectations of $9.95 billion. The company said that its olefins and polyolefins division in the Americas regions improved chain margins and volumes, overcoming headwinds from rising input costs. Robust demand globally helped support margins in the intermediates and derivatives segments. Integration activities related to the acquisition of A. Schulman are on schedule and estimated to have generated $32 million in forward annual run-rate synergies.  The recent quarter included $53 million of transaction and integration costs of Schulman, which decreased earnings by $0.11 per share.

       Lyondell’s earnings should continue moving upward. Even though sales topped out at $51 billion in 2011, share net has been rising steadily since then, thanks to improving operating efficiencies. With A. Schulman in its ranks, sales ought to start moving up again. Earnings should also continue to move higher thanks to synergy savings driven by combining Schulman into the operating structure. Full-year earnings are pegged at $11.60 per share and the $4.00 dividend – yielding 4.5% – should continue to rise given the company’s strong cash flow.

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