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Westlake Chemical (WLK) to Post Q3 Earnings: What's in Store?

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Westlake Chemical Company (WLK - Free Report) is set to release third-quarter 2021 results before market open on Nov 2. The company’s earnings are likely to have benefited from higher demand for polyethylene and polyvinyl chloride (“PVC”) resin. However, higher feedstock costs might have been a headwind.

Westlake Chemical beat the Zacks Consensus Estimate for earnings in all the last four quarters. It has a trailing-four quarter earnings surprise of 21.1%, on average. The company posted an earnings surprise of 6.3% in the last reported quarter.

Shares of Westlake Chemical are up 44.3% in the past year compared with a 44.1% surge of its industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for Westlake Chemical’s third-quarter revenues is currently pinned at $2,716 million, which indicates a 43.1% year-over-year increase.

The Zacks Consensus Estimate for the Olefins division’s revenues is pegged at $587 million, suggesting a 59.1% rise year over year.

The consensus estimate for Vinyls unit’s revenues is at $1,592 million, indicating an increase of 4.1% year over year.

Factors to Watch for

Westlake Chemical is likely to have benefited from higher demand for polyethylene in the third quarter, aided by its focus in specialty applications that include food packaging and healthcare.

The company is likely to have gained from higher demand for PVC resin and construction-related downstream building products with the easing of pandemic-induced restrictions. Demand in the downstream building products business is expected to have remained strong in the third quarter on new housing starts and spending on repair and remodeling activities.

However, it is likely to have been impacted by an upswing in feedstock costs. Continued impacts of feedstock cost inflation are expected to get reflected on margins.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Westlake Chemical this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Westlake Chemical is -0.95%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $4.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Westlake Chemical currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical Corporation Price and EPS Surprise

 

Westlake Chemical Corporation Price and EPS Surprise

Westlake Chemical Corporation price-eps-surprise | Westlake Chemical Corporation Quote

 

Other Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

B2 Gold Corp. (BTG - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +0.53% and carries a Zacks Rank #3.

The Chemours Company (CC - Free Report) , scheduled to release earnings on Nov 4, has an Earnings ESP of +1.26% and carries a Zacks Rank #2.

Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 3, has an Earnings ESP of +8.73% and carries a Zacks Rank #3.