We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Westlake (WLK) Up 9.5% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Westlake Chemical (WLK - Free Report) . Shares have added about 9.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Westlake due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Westlake Chemical’s Q2 Earnings and Sales Beat Estimates
Westlake Chemical posted earnings of 11 cents per share for the second quarter of 2020, down from 92 cents per share it earned in the year-ago quarter. The Zacks Consensus Estimate for the quarter was a loss of a penny per share.
The bottom line in the reported quarter was hurt by lower demand due to the impacts of the coronavirus pandemic and a sharp decline in oil prices. Lower demand and oil prices led to reduced global sales prices for the company’s major products as well as lower sales volumes for caustic soda and downstream vinyls products.
Sales fell roughly 20% year over year to $1,709 million. The figure surpassed the Zacks Consensus Estimate of $1,653.8 million.
Segment Highlights
Sales in the Olefins segment fell roughly 24% year over year to $361 million in the reported quarter. Operating income in the segment declined around 70% to $25 million. The decrease was mainly due to lower sales prices for polyethylene resulting from the pandemic and reduced oil prices, partly offset by increased polyethylene volumes and lower feedstock and fuel costs.
The Vinyls segment generated sales of $1,348 million, down around 19% year over year. Operating income in the segment was $20 million, down roughly 84% year over year. The decline was caused by the impacts coronavirus and lower oil prices.
Financial Position
Westlake Chemical ended the quarter with cash and cash equivalents of $1,109 million, up nearly three fold year over year. Long-term debt was $3,745 million, up around 40% year over year.
Cash flow from operations was $448 million in the quarter, up 40% year over year.
Outlook
Westlake Chemical said that it is well placed to continue to serve its customers’ needs while reducing operating costs, managing working capital and lowering capital expenditures. The company expects the prudent management of its business through the pandemic along with its strong business fundamentals to enable it to deliver long-term value to shareholders.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 106.84% due to these changes.
VGM Scores
At this time, Westlake has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Westlake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Westlake (WLK) Up 9.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Westlake Chemical (WLK - Free Report) . Shares have added about 9.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Westlake due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Westlake Chemical’s Q2 Earnings and Sales Beat Estimates
Westlake Chemical posted earnings of 11 cents per share for the second quarter of 2020, down from 92 cents per share it earned in the year-ago quarter. The Zacks Consensus Estimate for the quarter was a loss of a penny per share.
The bottom line in the reported quarter was hurt by lower demand due to the impacts of the coronavirus pandemic and a sharp decline in oil prices. Lower demand and oil prices led to reduced global sales prices for the company’s major products as well as lower sales volumes for caustic soda and downstream vinyls products.
Sales fell roughly 20% year over year to $1,709 million. The figure surpassed the Zacks Consensus Estimate of $1,653.8 million.
Segment Highlights
Sales in the Olefins segment fell roughly 24% year over year to $361 million in the reported quarter. Operating income in the segment declined around 70% to $25 million. The decrease was mainly due to lower sales prices for polyethylene resulting from the pandemic and reduced oil prices, partly offset by increased polyethylene volumes and lower feedstock and fuel costs.
The Vinyls segment generated sales of $1,348 million, down around 19% year over year. Operating income in the segment was $20 million, down roughly 84% year over year. The decline was caused by the impacts coronavirus and lower oil prices.
Financial Position
Westlake Chemical ended the quarter with cash and cash equivalents of $1,109 million, up nearly three fold year over year. Long-term debt was $3,745 million, up around 40% year over year.
Cash flow from operations was $448 million in the quarter, up 40% year over year.
Outlook
Westlake Chemical said that it is well placed to continue to serve its customers’ needs while reducing operating costs, managing working capital and lowering capital expenditures. The company expects the prudent management of its business through the pandemic along with its strong business fundamentals to enable it to deliver long-term value to shareholders.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 106.84% due to these changes.
VGM Scores
At this time, Westlake has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Westlake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.