Westlake Chemical says shutdown of a facility, costs from an unexpected outage at another will reduce its pretax Q2 earnings by about US$14M, but company expects insurance recoveries to offset most of that impact

Graziela Medina Shepnick

HOUSTON , June 23, 2011 (Associated Press) – Westlake Chemical Corp. said Thursday that the shutdown of a production plant and costs stemming from an unexpected outage at another will reduce its pretax second-quarter earnings by about $14 million.

The news sent Westlake shares down $2.61, or 5 percent, to $49.79 in early trading.

The Houston chemical maker said its North American Pipe Corp. subsidiary shut down its Springfield, Ky., PVC pipe plant in order to cut costs and eliminate excess capacity. Shutdown and impairment-related charges from that move are expected to lower the company's second-quarter pretax earnings by about $4 million.

Customers previously served from Springfield facility won't experience any disruptions and will now be served through the company's other pipe plants, the company said.

In addition, Westlake said repair costs and lost production from a weather-related power outage at its Lake Charles, La., plant will cut the quarter's pretax earnings by about $10 million.

But the company said it expects insurance recoveries to offset most of that impact down the road. The plant has since returned to normal operations.

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