We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
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.
Westlake (WLK) Earnings and Revenues Lag Estimates in Q2
Read MoreHide Full Article
Westlake Corporation (WLK - Free Report) logged a profit of $297 million or $2.31 per share in the second quarter of 2023, down from $858 million or $6.60 per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $2.83.
The results in the reported quarter were hurt by reduced average sales prices and integrated margins in performance materials and lower sales volumes in most product categories. WLK faced challenges from continued softness in global manufacturing and industrial activity.
Sales fell around 27% year over year to $3,251 million in the quarter. It lagged the Zacks Consensus Estimate of $3,448.5 million.
Sales in the Performance and Essential Materials segment went down around 31% year over year to $2,136 million in the reported quarter. It was below our estimate of $2,156.5 million. Operating income in the segment was $215 million, a roughly 78% year-over-year decline. The downside was due to reduced polyethylene and PVC resin selling prices and integrated margins as well as lower operating rates and sales volumes.
The Housing and Infrastructure Products segment generated sales of $1,115 million, down around 19% from the year-ago quarter. The figure was below our estimate of $1,137.1 million. Operating income in the segment was $190 million, down roughly 19% from a year ago. The decline was due to reduced sales volumes, especially in infrastructure products.
Financial Position
Westlake ended the quarter with cash and cash equivalents of $2,677 million, up around 103% year over year. Long-term debt was $4,894 million, up roughly 0.7% year over year.
Net cash provided by operating activities was $555 million in the quarter.
Outlook
WLK noted that it will focus on improving controllable costs and commercializing innovation in the Performance and Essential Materials unit in the remainder of 2023. For the Housing and Infrastructure Products segment, the company believes that its diverse portfolio of products with varied price points will allow it to help its customers address homebuyer affordability concerns through substitution of materials.
Price Performance
Westlake’s shares have gained 38.5% in a year compared with the industry’s 26.3% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
WLK currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , PPG Industries, Inc. (PPG - Free Report) and ATI Inc. (ATI - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.36, implying year-over-year growth of 194.7%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 78% in a year.
PPG Industries currently carries a Zacks Rank #1. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 13% in a year.
ATI currently carrying a Zacks Rank #2 (Buy). It has a projected earnings growth rate of 13.1% for the current year.
ATI’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 50% in a year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Westlake (WLK) Earnings and Revenues Lag Estimates in Q2
Westlake Corporation (WLK - Free Report) logged a profit of $297 million or $2.31 per share in the second quarter of 2023, down from $858 million or $6.60 per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $2.83.
The results in the reported quarter were hurt by reduced average sales prices and integrated margins in performance materials and lower sales volumes in most product categories. WLK faced challenges from continued softness in global manufacturing and industrial activity.
Sales fell around 27% year over year to $3,251 million in the quarter. It lagged the Zacks Consensus Estimate of $3,448.5 million.
Westlake Corp. Price, Consensus and EPS Surprise
Westlake Corp. price-consensus-eps-surprise-chart | Westlake Corp. Quote
Segment Highlights
Sales in the Performance and Essential Materials segment went down around 31% year over year to $2,136 million in the reported quarter. It was below our estimate of $2,156.5 million. Operating income in the segment was $215 million, a roughly 78% year-over-year decline. The downside was due to reduced polyethylene and PVC resin selling prices and integrated margins as well as lower operating rates and sales volumes.
The Housing and Infrastructure Products segment generated sales of $1,115 million, down around 19% from the year-ago quarter. The figure was below our estimate of $1,137.1 million. Operating income in the segment was $190 million, down roughly 19% from a year ago. The decline was due to reduced sales volumes, especially in infrastructure products.
Financial Position
Westlake ended the quarter with cash and cash equivalents of $2,677 million, up around 103% year over year. Long-term debt was $4,894 million, up roughly 0.7% year over year.
Net cash provided by operating activities was $555 million in the quarter.
Outlook
WLK noted that it will focus on improving controllable costs and commercializing innovation in the Performance and Essential Materials unit in the remainder of 2023. For the Housing and Infrastructure Products segment, the company believes that its diverse portfolio of products with varied price points will allow it to help its customers address homebuyer affordability concerns through substitution of materials.
Price Performance
Westlake’s shares have gained 38.5% in a year compared with the industry’s 26.3% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
WLK currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , PPG Industries, Inc. (PPG - Free Report) and ATI Inc. (ATI - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.36, implying year-over-year growth of 194.7%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 78% in a year.
PPG Industries currently carries a Zacks Rank #1. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 13% in a year.
ATI currently carrying a Zacks Rank #2 (Buy). It has a projected earnings growth rate of 13.1% for the current year.
ATI’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 50% in a year.