Core Viewpoint - Westlake Chemical Partners LP (NYSE: WLKP) is currently trading at $22.05 per share, with the market exhibiting a pessimistic outlook due to a temporary operational downturn, which may have led to an undervaluation of the company [1]. Group 1 - The market's focus on the temporary operational downturn has overshadowed the company's long-term potential and fundamentals [1]. - The current share price reflects an overly negative sentiment that may not align with the company's intrinsic value [1].

Core Viewpoint - Westlake Corporation reported a significant loss in Q1 2025, contrasting sharply with the profit from the same quarter last year, indicating challenges in sales and operational performance [1][2]. Financial Performance - The company reported a loss of $40 million or 31 cents per share for Q1 2025, compared to a profit of $174 million or $1.34 per share in Q1 2024 [1]. - Sales decreased by approximately 4.3% year over year to $2,846 million, missing the Zacks Consensus Estimate of $2,920 million [1]. - The Performance and Essential Materials segment saw sales decline by around 4.2% to $1,850 million, falling short of the estimate of $1,907.8 million, with an operational loss of $163 million compared to an income of $22 million in the previous year [2]. - The Housing and Infrastructure Products (HIP) segment generated sales of $996 million, down about 4.6% from the previous year, missing the estimate of $1,077.4 million, with an operational income of $148 million, a decrease of $62 million from Q1 2024 [3]. Cash Flow and Financial Position - Operating activities resulted in a net cash outflow of $77 million in Q1 2025, with capital expenditures amounting to $248 million, leading to a free cash outflow of $325 million [4]. - As of March 31, 2025, the company had approximately $2.3 billion in cash and cash equivalents, alongside total debt of $4.6 billion [4]. Operational Outlook - The Petro 1 ethylene unit has completed its turnaround, and with no major maintenance planned, operating rates are expected to improve [5]. - Despite uncertainties in global trade policy affecting customer caution, Westlake is positioned favorably due to its cost advantages in feedstock and a diversified business model [5]. Market Position - Westlake Corporation currently holds a Zacks Rank of 5 (Strong Sell), indicating a challenging market perception [6]. - Comparatively, other companies in the Basic Materials sector, such as Brenntag SE and Contango Ore, have stronger rankings, suggesting a more favorable outlook for those firms [6].

Financial Performance - Net sales for Q1 2025 were $2,846 million, a decrease of 4.3% compared to $2,975 million in Q1 2024[11] - Gross profit for Q1 2025 was $232 million, down 50.2% from $466 million in Q1 2024[11] - Net loss attributable to Westlake Corporation for Q1 2025 was $40 million, compared to a net income of $174 million in Q1 2024[11] - Basic earnings per share for Q1 2025 were $(0.31), a decline from $1.35 in Q1 2024[11] - Comprehensive loss for Q1 2025 was $26 million, compared to a comprehensive income of $140 million in Q1 2024[14] - Net income for the three months ended March 31, 2025, was a loss of $35 million, compared to a net income of $185 million for the same period in 2024, representing a significant decline[21] - Cash flows from operating activities resulted in a net cash outflow of $77 million for Q1 2025, compared to a net cash inflow of $169 million in Q1 2024[21] - Other income for Q1 2025 was $37 million, down from $50 million in Q1 2024, with interest income contributing $29 million in 2025 compared to $40 million in 2024[71] Assets and Liabilities - Total assets as of March 31, 2025, were $20,711 million, slightly down from $20,750 million at the end of 2024[9] - Total liabilities increased to $9,790 million as of March 31, 2025, compared to $9,707 million at the end of 2024[9] - Cash and cash equivalents decreased to $2,297 million from $2,919 million at the end of 2024[9] - Retained earnings decreased to $10,373 million as of March 31, 2025, from $10,481 million at the end of 2024[9] - Total accounts receivable increased to $1,656 million as of March 31, 2025, up from $1,483 million at the end of 2024, indicating a rise of approximately 11.6%[41] - Inventories rose to $1,781 million as of March 31, 2025, compared to $1,697 million at the end of 2024, reflecting an increase of about 4.9%[42] - Total long-term debt amounted to $4,674 million, an increase from $4,645 million as of December 31, 2024[46] - The carrying value of long-term debt was $4,592 million as of March 31, 2025, compared to $4,562 million at the end of 2024[56] Shareholder Activities - The company repurchased 279,771 shares of common stock during the first quarter of 2025[16] - The company paid dividends totaling $68 million in Q1 2025, slightly up from $65 million in Q1 2024[21] - Dividends declared per common share increased to $0.5250 for the three months ended March 31, 2025, compared to $0.5000 in 2024[65] Legal and Regulatory Matters - The company has reserved approximately $76 million for damages awarded in a lawsuit related to negligence and trespass at the Natrium Plant[81] - The company is involved in multiple antitrust lawsuits, including claims seeking $861 million in damages from direct purchasers of caustic soda and €1,397 million from BASF for alleged cartel activities[75][78] - The company anticipates that the resolution of various legal and regulatory matters, particularly environmental issues, will take an extended period of time[73] - The company is currently unable to estimate the financial impact of ongoing lawsuits, including those related to ethylene and PVC pipe antitrust claims[78][80] - The company entered into a settlement agreement in 2023 regarding caustic soda lawsuits, but the agreement was terminated after the court rejected preliminary approval in June 2024[75] - The company is defending against a lawsuit filed by PPG Industries regarding indemnification related to a Brazilian lawsuit, with potential implications for financial statements[85][86] Environmental and Compliance Issues - Environmental contingencies reserves were approximately $70 million as of March 31, 2025, down from $72 million at the end of 2024[87] - The company reserved approximately $32 million for monitoring wells and other remedial activities related to compliance orders from the Louisiana Department of Energy and Natural Resources[92] - The company assessed reasonably possible loss contingencies related to environmental matters in the range of $100 million to $170 million[94] - The company is facing uncertainty regarding the potential impact of evolving claims and programs related to natural resource damage and industrial site reuse initiatives[73] Segment Performance - Performance and Essential Materials segment reported a loss from operations of $163 million for Q1 2025, compared to a profit of $22 million in Q1 2024[100] - Housing and Infrastructure Products segment generated an income from operations of $148 million in Q1 2025, down from $210 million in Q1 2024[100] - Total capital expenditures for the consolidated company were $248 million in Q1 2025, compared to $272 million in Q1 2024[100] Cash Flow and Investments - The company reported a net cash used for investing activities of $434 million in Q1 2025, compared to $272 million in Q1 2024, indicating a 60% increase in cash outflow[21] - Cash, cash equivalents, and restricted cash decreased to $2,313 million at the end of Q1 2025 from $3,124 million at the end of Q1 2024, a decline of approximately 26%[21] - The company invested $248 million in property, plant, and equipment during Q1 2025, compared to $272 million in the same period of 2024[21]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported EBITDA of $288 million on net sales of $2.8 billion, with a net loss of $40 million or $0.31 per share, a decrease of $214 million in net income year-over-year [6][13] - The year-over-year decline in net income was primarily due to higher North American feedstock and energy costs of approximately $100 million, planned turnarounds, and unplanned outages impacting EBITDA by approximately $80 million [13][19] - The company’s cash and investments as of March 31, 2025, were $2.5 billion, with total debt at $4.6 billion [19] Business Segment Data and Key Metrics Changes - The Housing and Infrastructure Products (HIP) segment produced EBITDA of $203 million on $1 billion of sales, with a 20% EBITDA margin, reflecting a $61 million decrease year-over-year due to a 2% decline in sales volumes and a 3% decline in average sales prices [17][18] - The Performance and Essential Materials (PEM) segment's EBITDA was $73 million, down from $253 million in Q1 2024, primarily due to a 59% increase in natural gas costs and a 42% increase in ethane costs, with a 2% decrease in sales volumes [19][19] - The company is raising its cost reduction target for 2025 by $25 million to a new range of $150 million to $175 million, building on $40 million of cost reductions achieved in Q1 [9][21] Market Data and Key Metrics Changes - Global demand remains below historical levels, with recent disruptions from tariffs weighing on global growth [8] - The company expects 2025 revenue and EBITDA margin in the HIP segment to be towards the low end of the previously communicated range of $4.4 billion to $4.6 billion, with EBITDA margin between 20% to 22% [20][21] - The construction season is expected to strengthen in Q2 and Q3, with housing starts forecasted to be in the 1.3 million range [67][85] Company Strategy and Development Direction - The company is focused on rightsizing operations for current economic realities, optimizing manufacturing footprint, and improving cost structure and operational reliability [9][10] - The company is taking proactive steps to enhance margins and create value for shareholders, including reducing capital spending forecast for 2025 by 10% to $900 million [10][21] - The company emphasizes its integrated business model, diversity of businesses, and strong investment-grade balance sheet as key strengths to navigate the uncertain macroeconomic environment [26][27] Management's Comments on Operating Environment and Future Outlook - Management noted that the direct impact from recent tariff announcements is largely manageable, with most products being USMCA compliant [24][25] - The company anticipates continued volatility in commodity prices and currency rates, which may impact the PEM segment in the second quarter and full year of 2025 [25] - Management expressed cautious optimism regarding the construction market, expecting positive sales growth for HIP in 2025 despite current challenges [20][21] Other Important Information - The company completed significant operational milestones, including the successful turnaround of the Petra 1 ethylene plant and new VCM tie-ins at the Geismar plant, which are expected to enhance reliability [10][11] - The company returned $68 million to shareholders in the form of dividends during the quarter and repurchased $30 million of common stock [20] Q&A Session Summary Question: Can you remind us the typical timeline for price realization in the HIP segment? - Management indicated that the HIP market is more stable in pricing dynamics compared to the PIM segment, allowing for more price stability despite input cost changes [31] Question: What do you anticipate retaliatory tariffs in China will do to PE operating rates and domestic prices? - Management noted that the mix of polyethylene produced is largely focused on domestic applications, limiting exposure to Asian market dynamics [32] Question: How did the PVC industry perform in the first quarter? - Management reported that the industry saw a build in inventory in anticipation of the construction season, with operating rates in the low to mid 80s [35] Question: Can you provide insights on the mix shift impact within HIP? - Management explained that the pull forward of pipe and fittings business in Q4 2024 led to a negative mix effect in Q1 2025, but they expect to regain share in higher value-added products [48][106] Question: What is the outlook for HIP EBITDA in Q2? - Management expects HIP EBITDA to improve in Q2 due to seasonal strength in construction and positive pricing trends in PVC [67][70] Question: How much of the $80 million outage costs were planned versus unplanned? - Management indicated that about two-thirds of the $80 million outage costs were related to planned turnarounds [75] Question: What is the company's stance on M&A opportunities? - Management stated that acquisition opportunities remain important, and they are continuously assessing the market for potential growth opportunities [80][82]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported EBITDA of $288 million on net sales of $2.8 billion, with a net loss of $40 million or $0.31 per share, reflecting a decrease in net income of $214 million year-over-year [7][13][14] - The year-over-year decline in net income was primarily due to higher North American feedstock and energy costs of approximately $100 million, planned turnarounds, and unplanned outages impacting EBITDA by approximately $80 million [13][14] - The company’s cash and investments as of March 31, 2025, were $2.5 billion, with total debt at $4.6 billion [19] Business Line Data and Key Metrics Changes - The Housing and Infrastructure Products (HIP) segment produced EBITDA of $203 million on $1 billion of sales, with a 20% EBITDA margin, reflecting a $61 million decrease year-over-year due to a 2% decline in sales volumes and a 3% decline in average sales prices [17][18] - The Performance and Essential Materials (PEM) segment's EBITDA was $73 million, down from $253 million in Q1 2024, primarily due to a 59% increase in natural gas costs and a 42% increase in ethane costs, alongside a 2% decline in sales volumes [19][19] Market Data and Key Metrics Changes - The company noted that global demand remains below historical levels, with recent disruptions from tariffs impacting global growth [8] - The PVC industry saw operating rates in the low to mid 80s, with a build in inventory in anticipation of the construction season [35][36] Company Strategy and Development Direction - The company is focused on rightsizing operations for current economic realities, optimizing manufacturing footprint, and raising cost reduction targets for 2025 to $150 million to $175 million [9][10] - Capital spending forecast for 2025 has been reduced by 10% to $900 million to support cash generation [10][22] - The company aims to enhance margins, optimize its footprint, and improve cost structure and operational reliability as it navigates the current business cycle [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed that while the macroeconomic environment is uncertain, proactive steps are being taken to mitigate impacts from trade tensions and commodity price volatility [24][25] - The company expects positive sales growth for the HIP segment in 2025, despite anticipating revenue and EBITDA margins to be towards the low end of previous guidance ranges [21][22] Other Important Information - The company completed significant operational milestones, including the successful turnaround of the Petra 1 ethylene plant and new VCM tie-ins at the Geismar plant, which are expected to enhance operational reliability [10][11] - The effective tax rate for 2025 is expected to be approximately 23%, with cash interest expense around $160 million [22] Q&A Session All Questions and Answers Question: Can you remind us the typical timeline for price realization in the HIP segment? - Management indicated that the HIP market is more stable in pricing dynamics compared to the PIM segment, allowing for more price stability despite input cost changes [31] Question: How did the PVC industry perform in the first quarter? - The industry saw a build in inventory in anticipation of the construction season, with operating rates in the 80s range [35][36] Question: What is the outlook for the HIP segment's EBITDA in Q2? - Management expects a seasonal ramp-up in construction activities, which should positively impact HIP's EBITDA in the second quarter [67] Question: How much of the $80 million outage costs were planned versus unplanned? - Approximately two-thirds of the $80 million outage costs were related to planned turnarounds [74] Question: What is the company's stance on M&A opportunities? - The company remains open to acquisition opportunities and is actively assessing potential value in the current market [80][82]

EXHIBIT 99.1 WESTLAKE CORPORATION Contact—(713) 960-9111 Investors—Steve Bender Media—L. Benjamin Ederington Westlake Corporation Reports First Quarter 2025 Results HOUSTON--(BUSINESS WIRE)--Westlake Corporation (NYSE: WLK) (the "Company" or "Westlake") today announced first quarter 2025 results. SUMMARY FINANCIAL HIGHLIGHTS (in millions of dollars, except per share data and percentages) | | | Three Months | | Three Months | | Three Months | | --- | --- | --- | --- | --- | --- | --- | | | | Ended March 31, ...

Financial Performance - Net sales were $2.846 billion, a decrease of 4% year-over-year (YoY) from $2.975 billion in 1Q 2024[6] - EBITDA was $288 million, a decrease of 47% YoY from $546 million in 1Q 2024[6] - The company has a strong cash position of $2.5 billion in cash, equivalents, and investments[4, 5, 8] - Westlake repurchased $30 million of shares of WLK common stock, with over $400 million share repurchase authorization remaining[8] Segment Performance - Housing and Infrastructure Products (HIP) - HIP segment sales were $996 million, a decrease of 5% YoY from $1.044 billion in 1Q 2024[10] - HIP segment EBITDA was $203 million, a decrease of 23% YoY from $264 million in 1Q 2024[6, 10] - The company expects 2025 HIP revenue and EBITDA margin to be towards the low ends of the previously-communicated ranges of $4.4 – $4.6 billion and 20% – 22%[11, 14] Segment Performance - Performance and Essential Materials (PEM) - PEM segment sales were $1.850 billion, a decrease of 4% YoY from $1.931 billion in 1Q 2024[15] - PEM segment EBITDA was $73 million, a decrease of 71% YoY from $253 million in 1Q 2024[6, 15] - Higher YoY prices for North American feedstocks and energy reduced EBITDA by approximately $100 million[8, 16] - Planned turnarounds and unplanned outages impacted EBITDA by approximately $80 million[5, 8, 16] Cost Savings and Capital Spending - Westlake achieved approximately $40 million of cost savings in 1Q 2025 and is raising its 2025 cost savings target by $25 million to $150 – $175 million[5] - The company is reducing its 2025 capital spending target by 10% to $900 million to support cash flows[5, 19]

Core Insights - Westlake Chemical (WLK) is expected to report quarterly earnings of $0.70 per share, a decline of 47.8% year-over-year, with revenues forecasted at $2.92 billion, reflecting a decrease of 1.9% compared to the same period last year [1] Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been revised downward by 9.8%, indicating a reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock price performance [3] Key Metrics Projections - The consensus estimate for 'Net external sales- Performance and Essential Materials' is $1.91 billion, down 1.1% year-over-year [5] - Analysts predict 'Net external sales- Housing and Infrastructure Products' will reach $1.06 billion, reflecting a year-over-year increase of 2% [5] - 'Net external sales- Performance and Essential Materials- Performance Materials' is estimated at $1.12 billion, a decrease of 3.4% year-over-year [6] - 'Net external sales- Performance and Essential Materials- Essential Materials' is projected at $753.23 million, down 1.8% year-over-year [6] - 'Net external sales- Housing and Infrastructure Products- Housing Products' is expected to be $883.99 million, a slight increase of 0.6% year-over-year [7] - 'Net external sales- Housing and Infrastructure Products- Infrastructure Products' is estimated at $172.19 million, reflecting a year-over-year increase of 4.4% [7] EBITDA Estimates - Analysts estimate 'EBITDA- Housing and Infrastructure Products' at $231.71 million, down from $264 million in the same quarter last year [8] - 'EBITDA- Performance and Essential Materials' is projected to be $199.94 million, compared to $253 million in the previous year [8] Stock Performance - Over the past month, shares of Westlake have declined by 9.4%, while the Zacks S&P 500 composite has decreased by only 0.7% [9] - Westlake currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the overall market in the near future [9]

Group 1 - The article discusses the investment strategy of a value investor with a strong background in Chemical Engineering, emphasizing a blend of fundamental valuation and technical analysis [1] - The investor is particularly interested in companies within the technical sector that meet valuation criteria and possess growth catalysts, while also being open to analyzing opportunities outside this sector [1] - There is a focus on understanding societal adaptations to economic, societal, and environmental pressures, indicating a broader perspective on market dynamics [1] Group 2 - The analyst has disclosed a beneficial long position in the shares of WLK, indicating a personal investment interest in the company [2] - The article is presented as an opinion piece, with no compensation received for the content aside from Seeking Alpha, highlighting the independence of the analysis [2] - Seeking Alpha clarifies that past performance does not guarantee future results, and the views expressed may not represent the platform as a whole, emphasizing the need for individual assessment of investment suitability [3]

A month has gone by since the last earnings report for Westlake Chemical (WLK) . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Westlake due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?It turns ...