I would finally advise you that this conference call is being broadcast live through an Internet webcast system that can be accessed on our webpage at westlake.com.
Now I'd like to turn the call over to Albert Chao. Albert?
Albert Y. Chao
Thank you, Dave. Good morning, ladies and gentlemen, and thank you for joining us. Westlake had a record first quarter and delivered the highest quarterly net income in our history. We reported net income of $87.8 million, or $1.31 per diluted share in the first quarter. We saw sales volumes increased sequentially in both our segments, and margins expanded as ethylene feedstock costs declined significantly. During the first quarter, ethane and poly [ph] feedstock costs decreased driven by the growing supply of the feedstocks and reduced demand as the industry saw a higher level of ethylene plant maintenance turnaround impacting approximately 7% of industry production capacity. The impact of these feedstock price declines resulted in another quarter of strong performance by our Olefins segment and the best Vinyls segment performance since mid-2008. The PVC industry saw its highest domestic and total revenue sales volumes during the first quarter since the second quarter of 2008. Our Vinyls domestic sales volumes improved over those in the first quarter of 2011 and those in the fourth quarter of 2011 as well.
The combination of improved sales volumes due to an earlier start to the construction season as a result of a warm winter and lower feedstock costs drove a significant improvement in earnings in our Vinyls segment this quarter. The lower feedstock costs we saw in the first quarter indicate to us that increased production of natural gas liquids has had, and will continue to have, a positive impact on our feedstock costs. The growing supply of natural gas liquids coming from new shale gas production, new NGL transmission plants and new pipelines should provide lower cost feedstocks for years to come, providing a globally competitive cost position for the ethane-based North American ethylene industry. During the first quarter of 2012, ethane-based ethylene had an average $0.30 per pound production cost advantage over naptha-based ethylene, putting producers who use naptha feedstock at a significant disadvantage. I'm encouraged by this quarter's performance, and I remain confident that feedstock cost advantage resulting from increased production of natural gas liquids will continue to have a very positive impact on our industry.
Read the rest of this transcript for free on seekingalpha.com