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Yippee! Chemical maker Huntsman's (NYSE: HUN  ) rocking third-quarter numbers undoubtedly lifted my mood. As regular readers, you must know how positive I am about the stock. What's even more interesting is how the old adage -- don't judge a book by its cover -- seems to apply here.

Huntsman's books might be showing third-quarter net losses, but in reality, there's more to cheer than cry about here. The stock has already moved up by more than 25% since the last time I wrote about it, but I remain positive on this company.

The great price game
Soaring product prices have been doing the trick for chemical players. Huntsman's revenue rose 24% from the year-ago quarter to almost $3 billion, largely because of the price factor, even though volumes fell.

Huntsman's largest segment, polyurethanes, saw sales rise 26% to $1.2 billion, while its pigments business sales grew the most by 39% in spite of lower volumes -- all backed by soaring prices.

What else can you expect after watching companies aggressively pass on prices? Flat or slow volumes but solid revenues -- it's been an industrywide trend. Dow Chemical's (NYSE: DOW  ) third-quarter volumes remained flat year on year, but prices drove its revenues up 17%.

Volumes for chemical giant DuPont (NYSE: DD  ) were also lukewarm, but higher global prices offset them to push its third-quarter sales by 32%. The 20% rise in Eastman Chemical's (NYSE: EMN  ) third-quarter revenue was also entirely because of this factor. And more recently, Kronos Worldwide's (NYSE: KRO  ) third-quarter sales surged a staggering 60% from last year as selling prices shot up.

So what led to the dent in Huntsman's bottom line? Its textile effects division, which was the only segment to report a fall in revenue in the last quarter. Huntsman has been restructuring this division, and some other operations, which led to restructuring charges of $155 million. As a result, Huntsman's bottom line slipped to net losses of $32 million from a profit of $55 million a year ago. But the company's adjusted earnings nevertheless managed to beat expectations.

Staying busy
Huntsman has kept itself extremely busy since the last quarter. One major plan it initiated was the restructuring of its textile effects division.

As I mentioned earlier, textiles has been the weakest spot among Huntsman's five divisions. And quarter after quarter, its margins were being affected by it. Now, as part of restructuring to reduce costs, Huntsman might even close down its textile division's production facilities and offices in Switzerland --  moves that make a lot of sense.

And the latest update is that Huntsman is replacing its Switzerland textiles facility with one in China. Keeping its eye on the emerging markets, the company has chosen to build its new technology center in Shanghai to support Asia's fast-growing industries.

Huntsman is also restructuring another division, advanced materials, primarily to reduce the negative impact of a stronger Swiss franc. At the same time, the company has maintained its focus on expansions. Huntsman has been expanding epoxy resins -- a good substitute for aluminum, especially in the aerospace industry.  

All these moves should add a lot of value to Huntsman's business.

The Foolish bottom line
Huntsman belongs to an industry that is witnessing higher demand and tighter supply, a favorable thing indeed. Moreover, Huntsman will also continue to ride the price hikes. So even if seasonality and destocking factors lead to lower volumes in the forthcoming quarters, higher prices should outpace it all.

Overall, solid earnings, great growth plans, and a dividend yield of 3.4% make this company a must-watch!

Make sure you do not miss out on how the restructuring plans shape up for Huntsman. The easiest and best way to stay updated on all the news and analysis of your favorite companies is to add them to our free stock-tracking service, My Watchlist.

Fool contributor Neha Chamaria does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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