Refining Gains Outpace Chemical Results in Third-Quarter Earnings
Shell
Shell reported adjusted earnings of $10.8 billion on Oct. 29. Its Chemicals and Products segment earned $3.86 billion, but nearly all of that came from refining and trading. The chemicals subsegment earned $103 million.
Shell said its chemicals manufacturing plants ran at 84% utilization and that the chemicals business was free cash flow positive for a second consecutive quarter. On the earnings call, management said Shell does not see itself as a natural owner of chemical assets and is in detailed talks to sell or restructure them.
Eastman
Eastman reported third-quarter sales of $2.39 billion on Oct. 29, up 8% from a year earlier. A 7% increase in selling prices accounted for most of the gain.
Adjusted earnings were $1.84 per share, up from $1.14 a year earlier. Both earnings and revenue came in slightly below analyst estimates.
Olin
Olin reported net income of $14.4 million, or 13 cents per diluted share, on Oct. 29. That compares with $42.8 million, or 37 cents per share, a year earlier. Sales rose to $1.75 billion from $1.71 billion, while adjusted EBITDA fell to $191.4 million from $222.4 million.
President and CEO Ken Lane said the company returned its vinyl chloride monomer assets to normal operations during the quarter. Those units at Freeport, Texas, had operating problems in the second quarter.
Olin expects a weaker fourth quarter. The company cited year-end customer destocking, higher feedstock costs, competition from subsidized Asian exports and significant planned maintenance turnarounds. It expects its merger with Huntsman Corp. to close in the first quarter of 2027.
Feedstock costs
Higher energy prices continue to affect producers. Brent crude traded near $118 a barrel on the morning of Oct. 30, about $53 higher than a year earlier, amid ongoing U.S.-Iran tensions.
Dow Inc. has proposed polyethylene price increases in the U.S. and Canada of 7 cents per pound for October and 5 cents per pound for November. Dow cited higher feedstock costs, including ethane.
Chemical Processing reported in August that ethane-fed U.S. commodity producers have benefited from the gap between oil and gas prices, while specialty producers have had more difficulty passing on higher costs.
