Westlake (NYSE:WLK) Issues Earnings Results, Misses Expectations By $0.04 EPS

Westlake (NYSE:WLK) issued its earnings results on Wednesday. The specialty chemicals company reported $0.45 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.49 by ($0.04), FiscalAI reports. The business had revenue of $2.98 billion during the quarter, compared to the consensus estimate of $2.94 billion. Westlake had a negative net margin of 3.91% and a positive return on equity of 1.99%. The firm’s revenue for the quarter was up 5.0% compared to the same quarter last year. During the same period last year, the business posted ($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 Stock Performance

Shares of NYSE:WLK opened at $66.27 on Friday. The company has a market capitalization of $8.47 billion, a price-to-earnings ratio of -19.10 and a beta of 0.66. The firm’s 50 day simple moving average is $67.35 and its 200 day simple moving average is $86.28. The company has a debt-to-equity ratio of 0.55, a current ratio of 2.38 and a quick ratio of 1.70. Westlake has a fifty-two week low of $56.33 and a fifty-two week high of $124.23.

Westlake Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, September 10th. Investors of record on Tuesday, August 25th were given a $0.5330 dividend. The ex-dividend date was Tuesday, August 25th. This represents a $2.13 dividend on an annualized basis and a dividend yield of 3.2%. This is a positive change from Westlake’s previous quarterly dividend of $0.53. Westlake’s dividend payout ratio is -61.38%.

Insider Transactions at Westlake

In other Westlake news, Chairman Albert Chao sold 38,873 shares of the company’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 sale, the chairman owned 642,880 shares of the company’s stock, valued at approximately $51,610,406.40. This represents a 5.70% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Corporate insiders own 1.40% of the company’s stock.

Wall Street Analysts Forecast Growth

Several equities analysts recently weighed in on WLK shares. UBS Group cut their price objective on shares of Westlake from $86.00 to $81.00 and set a “buy” rating on the stock in a report on Thursday. KeyCorp started coverage on shares of Westlake in a report on Friday, September 11th. They set an “overweight” rating and a $92.00 target price for the company. JPMorgan Chase & Co. dropped their target price on shares of Westlake from $80.00 to $65.00 and set a “neutral” rating for the company in a research report on Friday, October 16th. Zacks Research downgraded Westlake from a “hold” rating to a “strong sell” rating in a research note on Friday, October 23rd. Finally, Morgan Stanley set a $76.00 price target on Westlake in a research report on Monday, October 26th. Four analysts have rated the stock with a Buy rating, eight have issued a Hold rating and three have assigned a Sell rating to the company. According to data from MarketBeat, Westlake currently has a consensus rating of “Hold” and a consensus target price of $80.80.

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.