(Reuters) – Petrochemical manufacturer LyondellBasell on Friday edged past Wall Street estimates for second-quarter profit and said it expects margins to continue to benefit from lower feedstock prices in the third quarter.
U.S. prices of natural gas, a key feedstock for chemical firms, have fallen 21.7% so far this year.
In the third quarter, the company said it expects margins to benefit from low costs for natural gas and natural gas liquids utilized in its North American and Middle East production, relative to higher oil-based costs in most other regions.
“With the summer driving season underway, oxyfuels margins are expected to remain above historical levels with high octane premiums,” it said in a statement.
Oxyfuels are a key component of clean-burning, high-octane gasoline. They improve fuel efficiency, engine performance and air quality by improving combustion efficiency, which in turn reduces vehicle emissions, including greenhouse gases.
The company said its second-quarter volumes benefited from increased production and improving seasonal demand.
LyondellBasell completed the sale of its U.S. Gulf Coast-based ethylene oxide and derivatives business for $700 million in May, which benefited its second-quarter earnings by 58 cents per share.
It posted adjusted profit of $2.24 per share in the second quarter, compared with analysts’ average estimate of $2.23 per share, according to LSEG data.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Shilpi Majumdar)
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