Back to top

Image: Bigstock

Westlake Chemical (WLK) Tops Q1 Earnings and Sales Estimates

Read MoreHide Full Article

Westlake Chemical (WLK - Free Report) recorded a profit of $138.2 million or $1.06 per share for the first quarter of 2017, up roughly 12% from $123.1 million or 94 cents per share a year ago. The results were aided by increased selling prices for key products and contributions of Axiall acquisition.

Barring one-time items, earnings for the reported quarter were $1.26 per share, which topped the Zacks Consensus Estimate of 80 cents.

Westlake Chemical raked in revenues of $1,942.6 million, up around 99% year over year. Sales in the quarter benefited from higher sales volumes for major products and increased selling prices for caustic and North American polyvinyl chloride (“PVC”) resin. Revenues also surpassed the Zacks Consensus Estimate of $1,765 million.

Westlake Chemical Corporation Price, Consensus and EPS Surprise

 

Westlake Chemical Corporation Price, Consensus and EPS Surprise | Westlake Chemical Corporation Quote

Segment Highlights

Sales from the Olefins segment climbed roughly 26% year over year to $543 million in the reported quarter, supported by higher selling prices of major products and increased polyethylene and ethylene sales volumes.

The Vinyls segment logged sales of $1,399.6 million, a roughly two-and-a-half-fold year over year surge, aided by higher caustic and PVC selling prices.

Financial Position

Westlake Chemical ended the first quarter with cash and cash equivalents of roughly $372.6 million, a roughly two-fold year-over-year increase. Long-term debt was $3,601.6 million.

Cash flow from operations was around $157.4 million for the first quarter, up 22% year over year.

Outlook

Westlake Chemical is seeing strong global demand for its key products. It is making progress in integrating the acquired Axiall business and is working towards achieving the expected synergies in 2017.

Price Performance

Westlake Chemical has outperformed the Zacks categorized Chemicals-Plastics industry over a year. The company’s shares have gained around 29.2% over this period, compared with roughly 8.1% gain recorded by the industry. 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.



 

Zacks Rank & Key Picks

Westlake Chemical is a Zacks Rank #2 (Buy).

Other well-placed companies in the chemicals space include Univar Inc. , The Chemours Company (CC - Free Report) and Kronos Worldwide Inc (KRO - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Univar has expected long-term growth of 9.4%.

Chemours has expected long-term growth of 15.5%.

Kronos has expected long-term growth of 5%.

More Stock News: 8 Companies Verge on Apple-Like Run

Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
 
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
 


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Westlake Corp. (WLK) - $25 value - yours FREE >>

Kronos Worldwide Inc (KRO) - $25 value - yours FREE >>

The Chemours Company (CC) - $25 value - yours FREE >>

Published in