Financial Performance - Westlake Corporation's net sales for 3Q 2025 were $2838 million, a decrease of 9% year-over-year from $3117 million in 3Q 2024[6, 25] - The company's EBITDA for 3Q 2025 was $313 million, a 46% decrease compared to $580 million in 3Q 2024[5, 6] - Westlake reported a net loss attributable to the company of $782 million for 3Q 2025, compared to a net income of $108 million in 3Q 2024[25, 27] - The company achieved approximately $115 million in company-wide cost savings year-to-date, including $40 million in 3Q 2025, toward its fiscal year 2025 target of $150 - $175 million[6] Segment Performance - Housing and Infrastructure Products (HIP) - HIP segment sales for 3Q 2025 were $1091 million, a 1% decrease compared to $1098 million in 3Q 2024[10, 25] - HIP segment EBITDA for 3Q 2025 was $215 million, an 18% decrease compared to $262 million in 3Q 2024[6, 10] - The company expects 2025 revenue and EBITDA margin for the HIP segment to be at the low ends of the previously communicated ranges of $4200 - $4400 million of sales with a 20% - 22% EBITDA margin[11] Segment Performance - Performance and Essential Materials (PEM) - PEM segment sales for 3Q 2025 were $1747 million, a 13% decrease compared to $2019 million in 3Q 2024[15, 25] - PEM segment EBITDA for 3Q 2025 was $90 million, a 70% decrease compared to $297 million in 3Q 2024[6, 15] - PEM EBITDA includes an estimated $32 million unfavorable FIFO impact[18] Strategic Initiatives - Westlake is progressing towards $200 million of identified cost savings in 2026, in addition to a footprint optimization benefit of approximately $100 million in 2026 from the Pernis shutdown[5] - The company is taking action to achieve $200 million of company-wide identified cost savings in 2026 with the majority of that occurring in the PEM segment[22]

Core Insights - Westlake reported revenue of $2.84 billion for the quarter ended September 2025, a decrease of 9% year-over-year, with an EPS of -$0.29 compared to $1.41 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $2.94 billion, resulting in a surprise of -3.44%, while the EPS surprise was -261.11% against a consensus estimate of $0.18 [1] Financial Performance Metrics - Net external sales for Performance and Essential Materials were $1.75 billion, below the four-analyst average estimate of $1.81 billion, reflecting a year-over-year decline of 13.5% [4] - Net external sales for Housing and Infrastructure Products reached $1.09 billion, slightly below the four-analyst average estimate of $1.11 billion, with a year-over-year change of -0.6% [4] - Performance Materials under Performance and Essential Materials reported net external sales of $1.01 billion, compared to the average estimate of $1.04 billion, marking a year-over-year decline of 13.2% [4] - Essential Materials under Performance and Essential Materials had net external sales of $737 million, below the average estimate of $791.16 million, representing a year-over-year decrease of 13.8% [4] - Housing Products under Housing and Infrastructure Products reported net external sales of $928 million, compared to the two-analyst average estimate of $954.76 million, showing a year-over-year change of -1% [4] - Infrastructure Products under Housing and Infrastructure Products had net external sales of $163 million, slightly above the average estimate of $170.69 million, with a year-over-year increase of 1.2% [4] - EBITDA for Housing and Infrastructure Products was $215 million, below the four-analyst average estimate of $245.11 million [4] - EBITDA for Performance and Essential Materials was -$654 million, significantly lower than the four-analyst average estimate of $127.18 million [4] Stock Performance - Westlake's shares have returned -4.3% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.6% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Westlake (WLK) came out with a quarterly loss of $0.29 per share versus the Zacks Consensus Estimate of $0.18. This compares to earnings of $1.41 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -261.11%. A quarter ago, it was expected that this chemical company would post earnings of $0.06 per share when it actually produced a loss of $0.09, delivering a surprise of -250%.Over the last four quarters, the company has not been a ...

Financial Performance - Westlake Corporation reported net sales of $2.8 billion for Q3 2025, a decrease of 9% from $3.1 billion in Q3 2024[4]. - The company experienced a net loss of $782 million, or $6.06 per share, compared to a net income of $108 million, or $0.83 per share, in Q3 2024[5]. - EBITDA for Q3 2025 was $(431) million, down from $505 million in Q3 2024, with EBITDA excluding Identified Items at $313 million[4][5]. - The Performance and Essential Materials segment reported a net sales decline of 13% year-over-year, with a loss from operations of $158 million compared to income of $66 million in Q3 2024[22]. - The Housing and Infrastructure Products segment generated net sales of $1.1 billion, a slight decrease from $1.1 billion in Q3 2024, with an income from operations of $151 million[4][19]. - The company recorded a non-cash impairment charge of $727 million related to the North American chlorovinyls business, significantly impacting earnings[5][17]. - The EBITDA margin for Q3 2025 was 11%, down from 19% in Q3 2024, reflecting lower average sales prices and margins[4][8]. - Gross profit for Q3 2025 was $236 million, down 53% from $499 million in Q3 2024[31]. - The company reported a net loss of $772 million in Q3 2025, compared to a net income of $120 million in Q3 2024[31]. - The impairment of goodwill amounted to $727 million in Q3 2025, with no such impairment reported in Q3 2024[31]. - The overall operating income margin for Q3 2025 was (27)%, while the margin excluding identified items was (1)%[39]. Cash Flow and Debt - Net cash provided by operating activities was $182 million, with total debt at $4.7 billion as of September 30, 2025[18]. - Cash and cash equivalents decreased to $1,927 million as of September 30, 2025, down from $2,919 million at the end of 2024[33]. - Total assets decreased to $19,814 million as of September 30, 2025, compared to $20,750 million at the end of 2024[33]. - Total liabilities increased to $9,876 million as of September 30, 2025, compared to $9,707 million at the end of 2024[33]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $240 million, a significant decrease from $880 million in the same period of 2024[35]. - Net cash provided by operating activities for Q3 2025 was $182 million, compared to $135 million in Q2 2025, and $880 million for the nine months ended September 30, 2025[39]. Cost Management and Future Outlook - Westlake expects to achieve $200 million in cost savings by the end of 2026, alongside $100 million in annual losses from the Pernis Shutdown starting in 2026[11]. - The company incurred restructuring, transaction, and integration-related costs of $17 million in Q3 2025, down from $75 million in Q3 2024[31]. Segment Performance - Sales volume decreased by 1% and average sales price decreased by 2% compared to Q2 2025, with a 6% decrease in Housing and Infrastructure Products sales volume[7][6]. - The Housing and Infrastructure Products segment reported net external sales of $1,091 million in Q3 2025, down from $1,160 million in Q2 2025[45]. - The Performance and Essential Materials segment had a loss from operations of $(902) million in Q3 2025, compared to $(318) million in Q2 2025[47]. - Average sales price for the Housing and Infrastructure Products segment decreased by 1% in Q3 2025 compared to Q2 2025, with a volume decrease of 6%[49]. Earnings Per Share - Diluted earnings per share attributable to Westlake Corporation for Q3 2025 was $(6.06), improving from $(1.11) in Q2 2025, with earnings per share excluding identified items at $1.41[41]. - Free cash flow for Q3 2025 was $(57) million, compared to $(132) million in Q2 2025, with a total of $157 million for the nine months ended September 30, 2025[43]. Identified Items Impact - Identified items added $744 million to the income from operations in Q3 2025, highlighting significant impacts on reported earnings[47]. - EBITDA for Q3 2025 was $67 million, a significant decrease from $(431) million in Q2 2025, while EBITDA for the nine months ended September 30, 2025 was $1,795 million[39].

Core Points - Westlake Chemical Partners GP LLC has declared a distribution of $0.4714 per unit for its partnership, marking the 45th quarterly distribution since its IPO [1] - The distribution is scheduled to be payable on November 26, 2025, to unit holders of record on November 10, 2025 [1] - This announcement serves as a qualified notice under Treasury Regulations [1]

Group 1: Company Overview - Westlake Corporation (NYSE:WLK) is recognized as one of the Best 52-Week Low Mid Cap Stocks to Buy Now [1] - The company is an international producer of materials used in construction, packaging, healthcare, automotive, and consumer products [3] Group 2: Analyst Ratings and Price Targets - On October 20, Truist Financial maintained a Buy rating on Westlake Corporation with a price target of $90 [1] - Earlier, on October 14, RBC Capital reduced the price target from $92 to $87 while maintaining an Overweight rating, reflecting a preview of Q3 earnings in the chemicals sector [2] Group 3: Market Conditions and Demand - Demand in the chemicals sector remained tepid throughout Q3, as indicated by discussions with investor relations teams [2] - Building and construction activity has also been muted, with a weaker job market posing a headwind for the industry [3] - The demand for consumer durables has yet to see substantial recovery [3]

Core Insights - Westlake Corporation (NYSE: WLK) has seen its shares roughly double since acquiring Axiall nearly a decade ago, including dividends [1] Group 1: Company Performance - The investment group "Value In Corporate Events" focuses on identifying opportunities in IPOs, mergers & acquisitions, earnings reports, and corporate capital allocation changes [1] - The coverage includes approximately 10 major events per month, aimed at finding the best investment opportunities [1]

Group 1: Company Overview - Westlake Corporation's share was trading at $89.58 as of September 11th, with trailing and forward P/E ratios of 69.52 and 37.59 respectively [1] - Westlake is the second-largest fully integrated global chlor-alkali producer, benefiting from structural advantages in ethylene feedstock access and energy efficiency in its production process [3] Group 2: Market Conditions - Commodity chemicals companies are facing challenging business conditions, with stock valuations near decade lows due to excess capacity in China and energy price distortions from the war in Ukraine [2] - Current market conditions have depressed Westlake's margins, but limited capacity additions in the U.S., closures in Europe, and restrained Chinese expansion support a favorable mid-cycle outlook [3] Group 3: Investment Thesis - Westlake's acquisition of Boral North America building products assets enhances its Housing & Infrastructure Products segment, complementing its PVC operations [4] - Valuation analysis suggests a share value around $110 based on mid-cycle EBITDA of $2.7 billion, NOPAT of $1.3 billion, and EPS of $9.22, indicating significant upside potential from current levels [4] - The company presents a compelling cyclical investment opportunity, with catalysts including sector recovery, higher utilization, and structural capacity advantages [4]

Core Insights - Westlake Corporation (WLK) reported a loss of $142 million or $1.11 per share for Q2 2025, a significant decline from a profit of $313 million or $2.40 per share in the same quarter last year [1] - Adjusted loss per share was 9 cents, missing the Zacks Consensus Estimate of earnings of 6 cents [1] Financial Performance - Sales decreased by approximately 7.9% year over year to $2,953 million, falling short of the Zacks Consensus Estimate of $3,039.3 million [2] - The decline in sales was attributed to lower sales volumes due to planned turnarounds, unplanned plant outages, and lower average sales prices [2] - The Performance and Essential Materials segment saw sales drop around 10.9% year over year to $1,793 million, with a loss from operations of $318 million compared to an income of $157 million in Q2 2024 [3] - The Housing and Infrastructure Products (HIP) segment generated sales of $1,160 million, down about 2.8% from the previous year, with income from operations decreasing by $44 million [4] Cash Flow and Financial Position - Operating activities generated $135 million in net cash during Q2 2025, while capital expenditures were $267 million, resulting in a free cash outflow of $132 million [5] - As of June 30, 2025, the company had approximately $2.09 billion in cash and cash equivalents, with total debt amounting to $4.65 billion [5] Future Outlook - Westlake anticipates operational improvements in the second half of 2025 as production at chlorovinyls facilities normalizes, despite challenges from weak global demand and high feedstock and energy costs [6] - The company is implementing cost-cutting measures aimed at saving $150-$175 million in 2025 and an additional $200 million by 2026 [6] - Planned facility closures and efficiency measures are expected to enhance profitability in 2026, supported by a broad product range and strong market position [6]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a **net loss of $131 million in Q2 2025**, a significant downturn from **$323 million net income in Q2 2024**, driven by lower sales and restructuring costs [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail financial statement preparation, accounting pronouncements, and key line items, including **$123 million in Pernis facility closure costs** and ongoing antitrust lawsuits - In June 2025, the company approved a plan to close all remaining operations at its Pernis, Netherlands facility, recognizing **$123 million** in related costs during the quarter, with additional charges of approximately **$78 million** expected in future periods[71](index=71&type=chunk)[72](index=72&type=chunk) - The company is a defendant in multiple antitrust lawsuits concerning caustic soda, ethylene, and PVC pipe, alleging price-fixing and conspiracy, with the potential financial impact currently indeterminable[80](index=80&type=chunk)[81](index=81&type=chunk)[84](index=84&type=chunk) - The company may be subject to reasonably possible loss contingencies related to environmental matters in the range of **$100 million to $170 million**, in addition to amounts already reserved[96](index=96&type=chunk) Segment Income (Loss) from Operations (in millions) | Segment | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Performance and Essential Materials | $(318) | $157 | $(481) | $179 | | Housing and Infrastructure Products | $222 | $266 | $370 | $476 | Consolidated Statement of Operations Highlights (3 & 6 Months Ended June 30) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $2,953 | $3,207 | $5,799 | $6,182 | | **Gross Profit** | $258 | $664 | $490 | $1,130 | | **Income (Loss) from Operations** | $(109) | $406 | $(141) | $629 | | **Net Income (Loss)** | $(131) | $323 | $(166) | $508 | | **Diluted EPS** | $(1.11) | $2.40 | $(1.42) | $3.75 | Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | $5,946 | $6,214 | | **Total Assets** | $20,806 | $20,750 | | **Total Current Liabilities** | $2,403 | $2,219 | | **Long-Term Debt, net** | $4,654 | $4,556 | | **Total Liabilities** | $10,015 | $9,707 | | **Total Equity** | $10,791 | $11,043 | Consolidated Cash Flow Highlights (6 Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $58 | $406 | | **Net Cash used for Investing Activities** | $(726) | $(495) | | **Net Cash used for Financing Activities** | $(197) | $(146) | | **Net Decrease in Cash** | $(835) | $(261) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **Q2 2025 net loss of $142 million** to lower sales, higher costs, and **$115 million in restructuring charges**, impacting segment operating incomes - The company's European and North American businesses have been negatively impacted by reduced demand and lower prices due to macroeconomic conditions, including the war in Ukraine, volatile energy prices, slower GDP growth, inflation, and higher interest rates since 2022[110](index=110&type=chunk) - In Q2 2025, the company recognized restructuring charges of **$115 million** related to the closure of its Pernis, Netherlands facility and the temporary cessation of operations of a PVC resin unit in Suzhou, China[135](index=135&type=chunk)[140](index=140&type=chunk) Key Financial Results Summary (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | **Net Sales** | $2,953 | $3,207 | $(254) | | **Income (Loss) from Operations** | $(109) | $406 | $(515) | | **Net Income (Loss) Attributable to Westlake** | $(142) | $313 | $(455) | | **Diluted EPS** | $(1.11) | $2.40 | $(3.51) | - Cash flow from operations decreased by **$348 million to $58 million** for the first six months of 2025, compared to **$406 million** in the same period of 2024, primarily due to lower earnings and cash used for a major plant turnaround[161](index=161&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2025 net sales decreased **8% to $2.95 billion**, with gross profit margin compressing to **9%** due to lower prices, volumes, and higher costs, impacting segment operating incomes Net Sales Percentage Change from Prior-Year Period (Q2 2025) | Segment | Average Sales Price | Volume | | :--- | :--- | :--- | | Performance and Essential Materials | -2% | -9% | | Housing and Infrastructure Products | -1% | -2% | | **Company Average** | **-1%** | **-7%** | - The Performance and Essential Materials segment's operating income decreased by **$475 million YoY** to a loss of **$318 million** in Q2 2025, driven by lower PVC and polyethylene sales prices, higher costs, plant outages, and **$115 million** in restructuring charges[145](index=145&type=chunk) - The Housing and Infrastructure Products segment's operating income decreased by **$44 million YoY to $222 million** in Q2 2025, primarily due to lower sales prices for pipe and fittings and lower sales volumes for building products[147](index=147&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, liquidity included **$2.085 billion cash** and **$192 million securities**, with **$4.657 billion long-term debt** and a fully available **$1.5 billion credit facility** - As of June 30, 2025, the company had cash and cash equivalents of **$2,085 million** and available-for-sale securities of **$192 million**[168](index=168&type=chunk) - Total long-term debt carrying value was **$4,657 million** as of June 30, 2025, with the company in compliance with all debt covenants[169](index=169&type=chunk)[177](index=177&type=chunk) - The company has a **$1.5 billion** revolving credit facility, which had no borrowings and full availability as of June 30, 2025[49](index=49&type=chunk)[178](index=178&type=chunk) - Under its stock repurchase program, the company repurchased **$30 million** of common stock in the first six months of 2025, with approximately **$386 million** remaining available for future repurchases as of June 30, 2025[163](index=163&type=chunk)[202](index=202&type=chunk)[204](index=204&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages commodity price, interest rate, and foreign currency risks through feedstock flexibility, derivatives, and hedging for its **$4.7 billion fixed-rate debt** and **€700 million senior notes** - The company faces commodity price risk as many of its products and raw materials are commodities, mitigating this risk through strategies like feedstock flexibility and derivative instruments[191](index=191&type=chunk) - As of June 30, 2025, the company had **$4.72 billion** in fixed-rate debt and **$16 million** in variable-rate debt, exposing it to interest rate risk upon refinancing or rate changes[192](index=192&type=chunk) - To mitigate foreign currency risk, the company uses foreign exchange hedging contracts with a notional value of **€150 million** and has designated its **€700 million** senior notes as a net investment hedge for its euro-denominated subsidiaries[194](index=194&type=chunk)[195](index=195&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[196](index=196&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[197](index=197&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company updates legal proceedings, including enforcement negotiations with the West Virginia DEP for its Natrium facility, with a potential penalty exceeding **$1 million** - The company is in enforcement negotiations with the West Virginia Department of Environmental Protection regarding alleged violations at its Natrium facility, with a potential penalty exceeding **$1 million**[199](index=199&type=chunk) - For a comprehensive update on legal matters, including various antitrust and environmental cases, the report refers to Note 13 of the consolidated financial statements[198](index=198&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are disclosed in this report; investors are referred to the 2024 Form 10-K for a comprehensive discussion - The report directs investors to Item 1A, "Risk Factors" in the 2024 Form 10-K for a discussion of potential risks[200](index=200&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the stock program in Q2 2025; **780 shares** were acquired for tax obligations, with **$386 million** remaining for future repurchases Common Stock Purchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Program | Max. Value Remaining for Purchase | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 400 | $92.64 | 0 | $386,178,956 | | May 2025 | 0 | N/A | 0 | $386,178,956 | | June 2025 | 380 | $75.78 | 0 | $386,178,956 | | **Total** | **780** | **$84.42** | **0** | | - No shares were repurchased under the company's **$500 million** stock repurchase program expansion during the three months ended June 30, 2025[204](index=204&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025[203](index=203&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data - The report includes required certifications from the CEO and CFO as exhibits[205](index=205&type=chunk)