Westlake (NYSE:WLK) Announces Earnings Results

Westlake (NYSE:WLK) released its quarterly earnings results on Wednesday. The specialty chemicals company reported $0.45 EPS for the quarter, missing analysts’ consensus estimates of $0.49 by ($0.04), FiscalAI reports. The company had revenue of $2.98 billion during 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 quarterly revenue was up 5.0% on a year-over-year basis. During the same period in the prior year, the firm earned ($0.29) EPS.

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 Trading Up 1.3%

Westlake stock traded up $0.91 during mid-day trading on Wednesday, hitting $69.38. The company’s stock had a trading volume of 583,144 shares, compared to its average volume of 1,131,892. The company has a debt-to-equity ratio of 0.55, a current ratio of 2.45 and a quick ratio of 1.70. The stock has a market cap of $8.87 billion, a price-to-earnings ratio of -7.25 and a beta of 0.66. The business has a 50 day moving average price of $67.65 and a 200-day moving average price of $86.49. Westlake has a 12 month low of $56.33 and a 12 month high of $124.23.

Westlake Increases Dividend

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

Insider Transactions at Westlake

In other news, Chairman Albert Chao sold 38,873 shares of the firm’s stock in a transaction dated Tuesday, August 11th. The stock was sold at an average price of $80.28, for a total transaction of $3,120,724.44. Following the transaction, the chairman directly owned 642,880 shares of the company’s stock, valued at approximately $51,610,406.40. This trade represents a 5.70% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. 1.40% of the stock is currently owned by insiders.

Key Stories 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

Analysts Set New Price Targets

Several research analysts recently issued reports on WLK shares. Zacks Research lowered shares of Westlake from a “hold” rating to a “strong sell” rating in a research report on Friday, October 23rd. Truist Financial lowered their price target on Westlake from $104.00 to $90.00 and set a “buy” rating on the stock in a research report on Thursday, October 1st. Citigroup reaffirmed a “neutral” rating and set a $67.00 price target (down from $85.00) on shares of Westlake in a research note on Monday, October 5th. UBS Group set a $86.00 price target on Westlake and gave the stock a “buy” rating in a research note on Monday, October 5th. Finally, Barclays began coverage on Westlake in a report on Monday, October 12th. They issued an “underweight” rating and a $66.00 price objective for the company. Four investment analysts have rated the stock with a Buy rating, eight have given a Hold rating and three have given a Sell rating to the stock. According to MarketBeat.com, Westlake currently has an average rating of “Hold” and an average target price of $81.13.

Westlake Company Profile

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.