Westlake misses Q3 profit estimates; sales in line

Westlake (WLK) reported adjusted earnings of 45 cents per share for the third quarter of 2026, missing the 57-cent consensus estimate. Net sales of $2.98 billion were in line with the $2.98 billion estimate, the company said in its press release.

Shares rose 1.4% in regular trading as of 10:03 a.m. ET, from a regular-session close of $68.47.

Westlake is headquartered in Houston and makes materials and products for housing and construction, packaging, healthcare, automotive and consumer goods, with operations in Asia, Europe and North America.

Here's how the company did:

• Adjusted EPS: 45 cents vs. 57 cents expected, from a loss of 29 cents a year earlier
• GAAP EPS: 5 cents, from a loss of $6.06 per share a year earlier
• Revenue: $2.98 billion vs. $2.84 billion a year earlier, in line with the $2.98 billion estimate
• EBITDA excluding identified items: $408 million vs. $313 million a year earlier
• Free cash flow: $220 million

Net sales rose 5% from a year earlier, the company said, as its average sales price increased 6% and comparable sales volume was unchanged.

GAAP net income attributable to Westlake was $6 million for the quarter, after identified items totaling $58 million.

Segment results

Housing and Infrastructure Products sales were $1.09 billion, roughly flat from a year earlier. A 6% drop in comparable sales volume was offset by a 1% rise in average sales price and a 5% contribution from the ACI acquisition, which the company completed in January 2026.

Segment income from operations was $128 million, down from $151 million a year earlier. The company said higher distribution costs weighed on margins.

Performance and Essential Materials sales rose 8% to $1.89 billion. The company cited a 9% increase in average sales price and a 4% rise in comparable sales volume. Segment EBITDA excluding identified items was $215 million, up from $90 million a year earlier.

From the second quarter, the segment's average sales price fell 8%, as price increases at the onset of the Middle East conflict moderated, the company said.

Charges and European operations

The company recorded $56 million of charges in Performance and Essential Materials tied to previously announced facility shutdowns, plus $2 million of other restructuring costs.

The company said European chemical conditions deteriorated during the quarter because of higher energy costs, weak demand and increasing imports. It is optimizing its European chlorovinyls footprint and has announced the closure of its PVC plant in Cologne, Germany.

"Despite these headwinds, Westlake generated $220 million of free cash flow during the quarter," said CEO Jean-Marc Gilson. He added that the three-pillar profitability improvement plan remains on track to deliver $600 million of EBITDA uplift in 2026.

Cash and fourth-quarter outlook

Operating cash flow was $408 million and capital expenditures were $188 million. At Sept. 30, the company had $2.0 billion of cash and investments and $5.1 billion of total debt.

The profitability improvement plan delivered about $200 million of EBITDA benefit in the third quarter, toward its full-year target of $600 million.

The company expects fourth-quarter Housing and Infrastructure Products revenue of between $900 million and $1 billion, with an EBITDA margin of about 13%.

CFO Jon Baksht said the company continues to return cash to shareholders through a dividend that has grown for 22 consecutive years since its 2004 IPO.

According to its SEC filings, net income has risen in each of the last three quarters, from a loss of $782.0 million in the third quarter of 2025 to $260.0 million in the second quarter of 2026.