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Westlake Chemical (WLK) Q4 Earnings Top Estimates, Sales Lag

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Westlake Chemical (WLK - Free Report) is a vertically integrated international producer and supplier of petrochemicals, polymers and fabricated products. The company's range of products includes ethylene, polyethylene, styrene, vinyl intermediates, PVC, PVC Pipe, PVC windows, fence and decking components.

Westlake Chemical is benefiting from healthy demand for olefins and vinyls products. Moreover, the Axiall Corp. acquisition is expected to deliver meaningful annual cost synergies. However, the company is exposed to pricing pressure.

Let’s have a quick look at the company’s fourth-quarter 2016 release.

Estimate Trend & Surprise History

Investors should note that the earnings estimate for Westlake Chemical for the fourth quarter has been stable over the last month. The company has beaten the Zacks Consensus Estimate in 2 of the trailing 4 quarters while missing twice, with an average positive surprise of 4.48%.

Earnings

Westlake Chemical’s adjusted earnings came in at 87 cents per share in the quarter, which topped the Zacks Consensus Estimate of 75 cents.

Revenues

Westlake Chemical reported revenues of $1,735.2 million, up around 76% year over year. Sales in the quarter benefited from the contribution of Axiall acquisition. However, revenues missed the Zacks Consensus Estimate of $1,776 million.

Key Developments to Note

The company said that it is gaining from healthy demand for its products and will benefit, in 2017, from improving commodity prices that are supported by the sustained recovery in oil prices. It is also making progress in integrating the acquired Axiall business and is working towards achieving the expected synergies.

Zacks Rank

Currently, Westlake Chemical has a Zacks Rank #4 (Sell), but that could change following its earnings report which was just released.

Market Reaction

Westlake Chemical’s shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

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