Group 1: Core Product Offering - Westlake Corporation's Westlake Royal Building Products unit is launching fire-rated roofing and stone solutions aimed at protecting homeowners in wildfire-prone areas, particularly in California [1] - The product portfolio includes various fire-rated roofing brands such as Newpoint Concrete Roof Tile, U.S. Tile Clay Roofing Products, Unified Steel-Stone coated roofing, and DaVinci Roofscapes, all designed to withstand extreme heat and provide natural fire resistance [2] - The new product lineup adheres to strict Wildland-Urban Interface guidelines and has been tested by Underwriters Laboratories, ensuring protection without sacrificing aesthetic appeal [3] Group 2: Company Performance and Rankings - Westlake Corporation currently holds a Zacks Rank of 4 (Sell), indicating a less favorable outlook compared to other companies in the Basic Materials sector [4] - Ingevity Corporation, with a Zacks Rank of 1 (Strong Buy), has a current-year earnings estimate of $2.75 per share and has beaten earnings estimates in three of the last four quarters [5] - Carpenter Technology Corporation has a Zacks Rank of 2 (Buy) and a current fiscal-year earnings estimate of $6.95 per share, having surpassed earnings estimates in all trailing quarters, with shares increasing by 207.1% over the past year [6] - ArcelorMittal also holds a Zacks Rank of 2 (Buy) with a current-year earnings estimate of $3.72 per share, having surpassed earnings estimates in three of the last four quarters [7]

Core Insights - Westlake Corporation (WLK) is launching EpoVIVE, a new epoxy product portfolio focused on sustainability, at JEC World in Paris from March 4-6 [1] - EpoVIVE aims to provide significant sustainability benefits over traditional products, featuring safer materials and energy-efficient applications, aligning with WLK's environmental goals [2] - The EpoVIVE portfolio is designed to cater to various industries, including aerospace, automotive, and construction, showcasing its versatility [3] Company Performance - WLK currently holds a Zacks Rank of 4 (Sell), indicating a less favorable outlook compared to other stocks in the Basic Materials sector [4] - Ingevity Corporation (NGVT) has a Zacks Rank of 1 (Strong Buy) with a current-year earnings estimate of $2.75 per share, demonstrating strong performance [5] - Carpenter Technology Corporation (CRS) has a Zacks Rank of 2 (Buy) with a current fiscal-year earnings estimate of $6.95 per share and a significant share price increase of 207.1% over the past year [6] - ArcelorMittal (MT) also holds a Zacks Rank of 2 (Buy) with a current-year earnings estimate of $3.72 per share, showing consistent performance with an average earnings surprise of 4.11% [7]

Westlake Corporation (WLK) logged a profit of $7 million or 6 cents per share for the fourth quarter of 2024. This compares to a loss of $497 million or $3.86 in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $1.04.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Sales rose around 0.6% year over year to $2,843 million in the quarter. It missed the Zacks Consensus Estimate of $2,904.6 million. A 3% growth in sales volume was offset by a 2% decline in averag ...

Financial Performance - The company reported a significant increase in revenue, reaching $X billion, representing a Y% growth compared to the previous year[7]. - User data showed an increase in active users, with a total of Z million users, reflecting a growth rate of A% year-over-year[7]. - The company provided an optimistic outlook for the next quarter, projecting revenue growth of B% and an expected operating margin of C%[7]. Product Development and Innovation - New product launches are anticipated to contribute an additional $D million in revenue, with a focus on innovative technologies in the pipeline[7]. - The company is investing $H million in R&D to develop new technologies aimed at sustainability and efficiency improvements[21]. Market Expansion - The company plans to expand its market presence in E regions, aiming for a market share increase of F% by the end of the fiscal year[7]. Acquisitions and Synergies - Recent acquisitions are expected to yield synergies of approximately $G million, enhancing operational efficiencies[21]. Capital Expenditures - Future capital expenditures are projected to be $I million, focusing on capacity expansions and modernization of existing facilities[21]. Economic Factors and Compliance - The company is closely monitoring macroeconomic factors, including inflation and interest rates, which could impact future performance[25]. - Compliance with new environmental regulations is expected to incur costs of approximately $J million, affecting the overall financial outlook[21].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported sales of $2.8 billion and EBITDA of $416 million, representing a 7% increase in EBITDA compared to Q4 2023's EBITDA of $390 million [17][24] - Full year 2024 net income was $677 million, with EBITDA totaling $2.3 billion, while total sales for 2024 declined by 3% to $12.1 billion due to a 10% decline in average sales prices [25][26] - The company achieved total cost reductions of $170 million in 2024, exceeding the target of $125 million to $150 million [16][32] Business Segment Data and Key Metrics Changes - The Housing and Infrastructure Products (HIP) segment achieved record income from operations of $807 million and an EBITDA margin of 24%, driven by an 8% sales volume growth [20][28] - The Performance and Essential Materials (PEM) segment saw a 1% increase in sales volume, primarily due to export market demand, although average sales prices were impacted by industry capacity increases [18][30] - HIP's EBITDA margin improved to 19% in Q4 2024, while PEM's EBITDA margin increased to 12% from 11% in the same period of 2023 [27][31] Market Data and Key Metrics Changes - North America showed strong demand across both segments, supported by a broad product portfolio and a strong feedstock position [19] - The company expects housing starts for 2025 to remain similar to 2024 at 1.3 million [33] Company Strategy and Development Direction - The company is focused on sustainability and has initiated several key projects, including a pilot program for post-consumer recycled PVC and investments in carbon waste transformation technology [36][37] - The company plans to continue optimizing its business to drive operational performance and reduce costs, with a target of $125 million to $150 million in cost reductions for 2025 [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the HIP segment, citing strong brand offerings and geographical reach [39][41] - The company acknowledges uncertainties in the global macroeconomic environment but remains focused on actions within its control to improve business performance [41] Other Important Information - The company returned approximately $325 million to shareholders through dividends and share repurchases in 2024 [21][32] - As of December 31, 2024, the company had $2.9 billion in cash and cash equivalents, with total debt of $4.6 billion [31] Q&A Session Summary Question: Insights on HIP margins and expected degradation - Management indicated that margin guidance reflects a product mix shift rather than a decline in overall demand [49] Question: Cost cuts distribution across divisions - Cost reduction efforts will be significant in both HIP and PEM segments, particularly in logistics and procurement [52] Question: Concerns about homebuilder outlook affecting volumes - Management remains confident in growth, expecting market penetration to increase despite broader economic concerns [59] Question: Impact of tariffs on PVC trade flows - Management is monitoring potential impacts of tariffs on trade patterns and will adapt as necessary [62] Question: Volume and price changes for the year - Year-over-year volume improvements were 6% for PEM and 8% for HIP, with price declines of 12% for PEM and 6% for HIP [81][84] Question: Free cash flow outlook for 2025 - Management expects stronger free cash flow generation in 2025 due to continued strength in the HIP business [90] Question: Recent demand experience in major product lines - Demand for polyethylene remains strong, with price initiatives reflecting good market conditions [118] Question: Expectations for EBITDA margins in 2025 - Management views the 20% to 22% EBITDA margin guidance as conservative, with potential for improvement if housing starts increase [132]

Westlake (WLK) Q4 2024 Earnings Call February 24, 2025 09:17 PM ET Company Participants Johnathan Zoeller - VP & TreasurerJean-Marc Gilson - President & CEOSteven Bender - CFO & EVPDavid Begleiter - Managing DirectorAleksey Yefremov - MD & Equity ResearchJohn Roberts - Managing DirectorMichael Leithead - Director - Equity ResearchKevin McCarthy - PartnerJosh Spector - Executive DirectorMichael Sison - Managing DirectorAziza Gazieva - Vice PresidentMatthew Blair - Managing Director Conference Call Participan ...

Earnings Presentation 4Q and Full Year 2024 1 Fourth Quarter and Full Year 2024 Highlights Fifth consecutive quarter of YoY sales volume growth with momentum into 2025 $2.8B Net Sales 1% increase YoY $416M EBITDA(1) 7% increase YoY (2) $434M Net Cash Provided by Operating Activities $12.1B Net Sales 3% decrease YoY $2.3B EBITDA(1,2) 12% decrease YoY(2) $1.3B Net Cash Provided by Operating Activities 4Q 2024 Financial Results FY 2024 Financial Results (1) Reconciliation of EBITDA excl. Identified Item to Net ...

Core Insights - Westlake Chemical reported $2.84 billion in revenue for Q4 2024, a year-over-year increase of 0.6%, but fell short of the Zacks Consensus Estimate by -2.12% [1] - The company's EPS for the same period was $0.06, a significant decline of -91.67% compared to $0.72 a year ago, representing a surprise of -94.23% against the consensus estimate of $1.04 [1] Financial Performance Metrics - Net external sales in Performance and Essential Materials were $1.86 billion, slightly below the average estimate of $1.88 billion, reflecting a year-over-year decrease of -1% [4] - Net external sales in Housing and Infrastructure Products reached $981 million, slightly below the estimated $986.27 million, but showed a year-over-year increase of +3.7% [4] - Net external sales for Housing Products were $818 million, compared to an estimate of $827.85 million, marking a +2.9% change year-over-year [4] - Essential Materials within Performance and Essential Materials reported $741 million, below the estimate of $826.41 million, indicating a -4.1% change year-over-year [4] - Infrastructure Products in Housing and Infrastructure Products achieved $163 million, exceeding the estimate of $151.67 million, with a year-over-year increase of +8% [4] - Performance Materials reported $1.12 billion, slightly below the average estimate of $1.15 billion, reflecting a +1.3% change year-over-year [4] - EBITDA for Housing and Infrastructure Products was $188 million, surpassing the average estimate of $150.48 million [4] - EBITDA for Performance and Essential Materials was $220 million, below the average estimate of $294.76 million [4] Stock Performance - Westlake's shares have returned -6.8% over the past month, underperforming the Zacks S&P 500 composite, which changed by -0.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Financial Performance - Westlake Chemical reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $1.04 per share, and down from $0.72 per share a year ago, representing an earnings surprise of -94.23% [1] - The company posted revenues of $2.84 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.12%, and slightly up from $2.83 billion year-over-year [2] Market Performance - Westlake shares have declined approximately 4.3% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The current Zacks Rank for Westlake is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.51 on revenues of $3.05 billion, and for the current fiscal year, it is $7.44 on revenues of $12.64 billion [7] - The estimate revisions trend for Westlake has been unfavorable ahead of the earnings release, which may impact future stock movements [6] Industry Context - The Chemical - Plastic industry, to which Westlake belongs, is currently ranked in the bottom 19% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Westlake reported fourth quarter 2024 net sales of $2.8 billion, a 1% increase year-over-year, driven by a 3% sales volume growth[6]. - The company achieved a net income of $7 million for the fourth quarter, which includes a one-time non-cash tax charge of $45 million[10]. - Full year 2024 net sales totaled $12.1 billion, with net income of $677 million, reflecting a decrease from $1.1 billion in 2023[13]. - EBITDA for the fourth quarter of 2024 was $416 million, a 7% increase from $390 million in the same period last year[12]. - Gross profit for Q4 2024 was $328 million, significantly up from $199 million in Q4 2023, contributing to a total gross profit of $1,957 million for the year, down from $2,219 million[31]. - The company reported a net income of $19 million in Q4 2024, recovering from a net loss of $487 million in Q4 2023, with a total net income of $647 million for the year compared to $522 million in 2023[31]. - Earnings per share for Q4 2024 were $0.06, a recovery from a loss of $3.86 per share in Q4 2023, with annual earnings per share increasing to $4.66 from $3.73[31]. Segment Performance - The Housing and Infrastructure Products segment reported an annual income from operations of $807 million and EBITDA of $1.1 billion[4]. - Performance and Essential Materials segment net sales for 2024 were $7.8 billion, a decrease of $0.5 billion compared to 2023, with a loss from operations of $204 million[21]. - The Housing and Infrastructure Products segment reported net sales of $981 million in Q4 2024, up from $946 million in Q4 2023, while the Performance and Essential Materials segment saw a slight decrease in sales to $1,862 million from $1,880 million[37]. - The Performance and Essential Materials segment reported net external sales of $2,019 million for the three months ended September 30, 2024, compared to $1,880 million in the same period of 2023, reflecting a growth of 7.4%[52]. - The Housing and Infrastructure Products segment achieved an operating income margin of 18% for the three months ended September 30, 2024, up from 13% in the same period of 2023[49]. Cash Flow and Liquidity - The company generated $434 million in net cash from operating activities in the fourth quarter and $1.3 billion for the full year 2024[15]. - Westlake's cash and cash equivalents stood at $2.9 billion, with total debt of $4.6 billion as of December 31, 2024[15]. - Cash and cash equivalents at the end of 2024 were $2,935 million, down from $3,319 million at the end of 2023[35]. - The company’s operating cash flow for 2024 was $1,314 million, a decrease from $2,336 million in 2023[35]. - Free cash flow for the three months ended September 30, 2024, was $254 million, compared to $149 million in the same period of 2023, marking an increase of 70.5%[46]. Future Outlook - The company anticipates continued growth in the Housing and Infrastructure Products segment due to increased demand for residential housing in the U.S.[9]. - Westlake plans to focus on cost-saving initiatives and new product innovations to enhance earnings growth in 2025[9]. - Westlake Corporation plans to continue focusing on operational efficiency and strategic investments to enhance long-term growth prospects[26]. Restructuring and Costs - The company incurred restructuring, transaction, and integration-related costs of $8 million in Q4 2024, down from $22 million in Q4 2023[31].