*Loses net $2.56 a share on economic downturn and weak oil
*CEO sees strength in its polyethylene segment
*Stock tumbles 17 percent
(Recasts with CEO comments, changes dateline from Toronto. In U.S. dollars unless noted)
CALGARY, Alberta, Jan 29 (Reuters) - Nova Chemicals Corp NCX.TO reported a deep fourth-quarter loss on Thursday, hurt by the global economic meltdown, but its chief executive said the high use of its raw plastics in consumer staple products bodes well for its fortunes this year.
Still, the stock tumbled 17 percent to a new 52-week low of C$3.72 on the Toronto Stock Exchange.
Nova, whose shares have been under pressure as the downturn has triggered questions over its liquidity and insolvency among some competitors, expects demand for polyethylene to remain robust with North American inventories low, CEO Jeff Lipton said.
Those factors "are putting our industry, I believe, in a position where we're going to see a sharp upturn in orders and have a lot of solid momentum for price increases to be put in place," Lipton told analysts.
"Our fundamental view of the marketplace is that polyethylene will remain one of the few very solid plastics and chemical product segments, and that dramatically low inventories will add impetus to the business for 2009."
Meanwhile, to deal with poor overall industry conditions, the company is working to cut costs and generate revenues in efforts to yield $400 million more cash this year than in 2008.
Lipton said manufacturing of consumer staples, such as food packaging, personal care items and garbage bags, made for the bulk of its polyethylene orders, and that segment of the economy saw sales increase in the fourth quarter.
That contrasts with automobiles, furniture and building materials, for which sales dropped as the recession worsened. They are not big drivers of polyethylene demand, he said.
In the quarter, Nova lost $214 million, or $2.56 a share, compared with a year-earlier profit of $126 million, or 1.51 cents a share.
Exceptional factors cut adjusted earnings in the quarter by $242 million, or $2.91 a share, it said.
Higher-cost third quarter inventory flowing through the income statement amounted to losses of $364 million before tax. It also wrote down the value of its year-end inventory by $129 million tax to reflect market prices as of Dec. 31, 2008.
Meanwhile, Nova had a $111 million before-tax improvement related to the appreciation of the U.S. dollar.
Excluding extraordinary items, the company lost $191 million, or 2.30 a share.
Analysts had expected, on average, a net loss of $2.38 a share before items, according to Reuters Estimates.
Revenues were $1.15 billion, down 36 percent from $1.8 billion in the fourth quarter of 2007.
Early this month, Nova shares dropped when investors fretted over its ability to repay $250 million of bonds due April 1. The company said on Thursday that it expects its year-end liquidity, support from its lenders and efforts to conserve its cash will allow it to make the payment. ($1=$1.22 Canadian) (Reporting by Jeffrey Jones and John McCrank; Editing by Frank McGurty)