Tax benefit lifts LyondellBasell net

NEW YORK (Reuters) - Commodity chemicals maker LyondellBasell Industries NV (LYB.N) posted a quarterly net profit compared with a year-earlier loss, boosted by an unexpectedly large income tax benefit.

As part of its exit from Chapter 11 bankruptcy protection last year, LyondellBasell said it would institute "fresh start" accounting, which effectively revalued its balance sheet.

That move helped the company book a $220 million income tax benefit for the fourth quarter, far above expectations.

The stock, which has risen 39 percent since listing on the New York Stock Exchange last October, fell 2.3 percent to $37.69 in afternoon trading.

"I don't think the Street had that in their estimates," BWS Financial analyst Hamed Khorsand said. "You back out the tax and you actually apply taxes to the numbers, and it doesn't look like that big of a beat."

The tax benefit boosted quarterly earnings by 60 cents per share, said Macquarie Research analyst Cooley May, who had forecast a tax benefit of only $130 million.

"I think it's going to take the Street awhile to understand what our tax structure is," LyondellBasell Chief Executive Jim Gallogly said in a phone interview. "We're a new company. We're a Dutch company. We have fresh start accounting and the balance sheet is significantly improved."

LyondellBasell is based in the Netherlands but is run out of Houston.

The company posted net income of $874 million, or $1.54 per share, for the fourth quarter, compared with a year-earlier net loss of $850 million.

Analysts on average expected earnings of 66 cents per share, according to Thomson Reuters I/B/E/S. It was unclear if the numbers were comparable given LyondellBasell's bankruptcy status in the year-ago quarter.

Revenue rose 20 percent to $10.61 billion. Analysts expected $10.16 billion.

The company's chemicals are used to make home insulation, foam stuffing for couches, automobile plastics and de-icing fluid for planes. LyondellBasell is also a large refiner of gasoline, heating oil and jet fuel.

Despite the tax benefit, Gallogly said results are gradually improving, and the company said it is able to pass on higher raw material costs to customers.

"Looking to the first quarter, industry fundamentals are unchanged, positioning us well for a solid beginning to 2011," Gallogly said.

Earlier this week hedge fund manager David Einhorn's Greenlight Capital disclosed an $88.6 million position in LyondellBasell.

(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn, Steve Orlofsky, John Wallace, Phil Berlowitz)