Westlake (NYSE:WLK) Announces Quarterly Earnings Results

Westlake (NYSE:WLK) posted its quarterly earnings data on Wednesday. The specialty chemicals company reported $0.45 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.49 by ($0.04), FiscalAI reports. The firm had revenue of $2.98 billion for the quarter, compared to analysts’ expectations of $2.94 billion. Westlake had a positive return on equity of 0.93% and a negative net margin of 10.94%. Westlake’s revenue was up 5.0% compared to the same quarter last year. During the same period in the prior year, the firm earned ($0.29) earnings per share.

Here are the key takeaways from Westlake’s conference call:

• Westlake reported $408 million of EBITDA and $220 million of free cash flow, both higher year over year, but EBITDA fell about $275 million sequentially as PEM prices declined, HIP volumes weakened, and input costs rose.
• PEM EBITDA increased $125 million year over year to $215 million, supported by higher selling prices and the three-pillar improvement plan, which delivered $500 million of uplift through the first three quarters. Management remains on track for $600 million of full-year improvement, though PEM earnings are still below mid-cycle levels.
• HIP faced weaker housing activity, higher costs, and lower volumes; third-quarter EBITDA fell $20 million year over year. Westlake expects fourth-quarter HIP revenue of $900 million to $1 billion and a margin of about 13%, and anticipates continued residential-construction weakness into 2027.
• European energy costs and weak PVC demand pressured PEM, prompting the Cologne PVC facility closure and consolidation of sales at Wilhelmshaven. Management expects the restructuring and access to lower-cost feedstocks to improve European profitability from 2027, targeting cash-flow neutrality.
• Westlake ended the quarter with $2 billion in cash and investments and $5.1 billion in debt, while lowering 2026 capital-spending guidance by $50 million to $850 million. Management said it expects a significant working-capital release to support fourth-quarter cash flow.

Westlake Price Performance

WLK stock traded up $0.67 during mid-day trading on Wednesday, reaching $69.14. 544,026 shares of the company traded hands, compared to its average volume of 1,131,675. The company has a fifty day moving average price of $67.65 and a 200-day moving average price of $86.49. Westlake has a 52-week low of $56.33 and a 52-week high of $124.23. The company has a market capitalization of $8.84 billion, a P/E ratio of -7.22 and a beta of 0.66. The company has a debt-to-equity ratio of 0.55, a current ratio of 2.45 and a quick ratio of 1.70.

Westlake Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, September 10th. Shareholders of record on Tuesday, August 25th were issued a dividend of $0.5330 per share. This represents a $2.13 dividend on an annualized basis and a yield of 3.1%. The ex-dividend date of this dividend was Tuesday, August 25th. This is a boost from Westlake’s previous quarterly dividend of $0.53. Westlake’s payout ratio is presently -22.23%.

Insider Activity

In other news, Chairman Albert Chao sold 38,873 shares of the firm’s stock in a transaction that occurred on Tuesday, August 11th. The shares were sold at an average price of $80.28, for a total value of $3,120,724.44. Following the completion of the transaction, the chairman directly owned 642,880 shares in the company, valued at approximately $51,610,406.40. This trade represents a 5.70% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Insiders own 1.40% of the company’s stock.

Wall Street Analysts Forecast Growth

Several equities analysts have commented on the stock. Citigroup reissued a “neutral” rating and set a $67.00 target price (down from $85.00) on shares of Westlake in a research report on Monday, October 5th. Zacks Research lowered Westlake from a “hold” rating to a “strong sell” rating in a report on Friday, October 23rd. JPMorgan Chase & Co. dropped their price target on Westlake from $80.00 to $65.00 and set a “neutral” rating on the stock in a report on Friday, October 16th. KeyCorp started coverage on shares of Westlake in a report on Friday, September 11th. They issued an “overweight” rating and a $92.00 price target on the stock. Finally, Truist Financial dropped their price objective on shares of Westlake from $104.00 to $90.00 and set a “buy” rating on the stock in a report on Thursday, October 1st. Four equities research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and three have issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, Westlake has a consensus rating of “Hold” and a consensus target price of $81.13.

Key Headlines Impacting Westlake

Here are the key news stories impacting Westlake this week:

• Positive Sentiment: Revenue rose 5% year over year to about $2.98 billion, topping the roughly $2.94 billion consensus estimate. Westlake also swung to positive quarterly earnings from a loss a year earlier, and the company reported improved adjusted EBITDA. Westlake Swings to Q3 Adjusted Earnings, Revenue Rise
• Negative Sentiment: Quarterly earnings were $0.45 per share, below the $0.49 analyst consensus cited in the results coverage. The shortfall may temper the positive read-through from higher sales and the year-over-year recovery. Westlake Q3 Earnings and Revenues Lag Estimates

About Westlake

Westlake Corporation is a global manufacturer of performance and essential materials, as well as products used in housing and infrastructure. Headquartered in Houston, Texas, the company serves customers in construction, packaging, healthcare, consumer products, automotive, and other industrial markets.

Westlake’s materials portfolio includes chlor-alkali and derivative chemicals, polyethylene, PVC, vinyl intermediates, epoxy resins, and other specialty products. These materials are used in applications such as water treatment, coatings, adhesives, plastics, medical products, and packaging.

Through its housing and infrastructure businesses, Westlake also produces building products including vinyl siding, trim, roofing products, pipe, fittings, and related components.