UPDATE 2-Westlake 1st-quarter profit falls, shares drop

(Adds analyst comment, share price move)

By Euan Rocha

NEW YORK, May 1 (Reuters) - Westlake Chemical Corp (WLK.N: Quote, Profile, Research) said on Thursday that first-quarter earnings fell, hurt by higher raw material prices and the slump in the U.S. housing market, sending shares down as much as 22 percent.

The chemical maker produces polyvinyl chloride, or PVC, resin used in pipes, wires and other products for which sales have been cut by the slump in the domestic housing market.

"This is a familiar story: feedstock costs have shot up while product price increases have not kept pace," said HSBC analyst Hassan Ahmed, in a note to clients.

Net income dropped to $5.4 million, or 8 cents a share, from $19.7 million, or 30 cents a share, a year earlier.

Quarterly sales rose 27 percent to $915.1 million, mainly due to higher selling prices for all of the major olefins and vinyl products.

However the price increases failed to offset the level of escalation in raw material costs.

Industry prices increased more than 70 percent for ethane and more than 50 percent for propane during the quarter as compared with the year-earlier period.