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Westlake (WLK) Down 13.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Westlake (WLK - Free Report) . Shares have lost about 13.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Westlake due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Westlake Corporation before we dive into how investors and analysts have reacted as of late.
Westlake’s Q1 Earnings Miss Estimates, Sales Down Y/Y on Lower Prices
Westlake logged an adjusted loss of 77 cents per share for the first quarter of 2026, wider than the Zacks Consensus Estimate of a loss of 22 cents. The adjusted loss widened 196.2% from a loss of 26 cents a year ago.
Net sales were $2.65 billion, down 6.8% year over year and missing the consensus mark of $2.87 billion by 7.7%. On the commercial side, overall sales volume (excluding plant closures and the ACI acquisition) fell 0.6%, and average sales price declined 2.5% from the year-ago quarter.
Segment Highlights
PEM net sales were $1,659 billion, down 10.3% from the year-ago quarter. It lagged our estimate of $1,823 million. The segment posted a loss from operations of $211 million, wider than the $163 million loss a year ago, as a 3% decline in average sales price was only partly offset by margin benefits from footprint optimization and cost-saving actions.
Within PEM, performance materials net sales slipped primarily due to lower polyethylene and PVC resin pricing and lower PVC resin sales volume tied to footprint optimization. Essential materials net sales were down mainly due to lower chlorine and caustic soda sales volume. PEM margins began improving late in the quarter amid supply chain disruption tied to the Middle East conflict. Management pointed to significantly higher PVC resin and polyethylene sales prices after the closure of the Strait of Hormuz, driven by a steepening global cost curve from sharply higher global feedstock and energy prices.
HIP net sales were $993 million, essentially flat year over year. The figure missed our estimate of $1,047 million. Income from operations was $56 million, down $92 million, as lower average sales prices and margins, particularly in Pipe & Fittings, and lower sales volume (excluding the ACI acquisition), weighed on results.
Operationally, the quarter reflected a split backdrop. Management highlighted continued strength in infrastructure spending supporting pipe-and-fittings volumes, including demand tied to new data centers, while subdued North American residential construction activity and pricing pressure offset those benefits. Westlake also continues integrating ACI, acquired in January 2026, which management said improved HIP’s exposure to the high-voltage wire and cable market.
Financials
Net cash used for operating activities was $94 million in the first quarter. Capital expenditures were $209 million, implying a free cash outflow of $303 million for the period. As of March 31, 2026, cash, cash equivalents and fixed-income investments totaled $2.5 billion, while total debt was $5.6 billion.
Outlook
Westlake updated its 2026 view for HIP, saying revenue and EBITDA margin are now expected to be at the lower ends of its previously communicated ranges of $4.4 billion to $4.6 billion of sales and a 19% to 21% EBITDA margin. The company attributed the shift to slower residential construction activity in North America and rising costs tied to the Middle East conflict.
Management also emphasized that, in addition to the pricing and margin benefits of a steeper global cost curve, it anticipates further earnings improvement in the coming quarters as it continues executing against the profitability improvement plan.
Beyond near-term pricing and energy dynamics, management continues to lean on its three-pillar profitability improvement plan focused on footprint optimization, cost savings and improved plant reliability. Westlake reiterated that it is targeting a $600 million EBITDA uplift in 2026, and it expects the significant majority of that uplift to benefit the PEM segment.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 30.91% due to these changes.
VGM Scores
Currently, Westlake has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Westlake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Westlake (WLK) Down 13.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Westlake (WLK - Free Report) . Shares have lost about 13.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Westlake due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Westlake Corporation before we dive into how investors and analysts have reacted as of late.
Westlake’s Q1 Earnings Miss Estimates, Sales Down Y/Y on Lower Prices
Westlake logged an adjusted loss of 77 cents per share for the first quarter of 2026, wider than the Zacks Consensus Estimate of a loss of 22 cents. The adjusted loss widened 196.2% from a loss of 26 cents a year ago.
Net sales were $2.65 billion, down 6.8% year over year and missing the consensus mark of $2.87 billion by 7.7%. On the commercial side, overall sales volume (excluding plant closures and the ACI acquisition) fell 0.6%, and average sales price declined 2.5% from the year-ago quarter.
Segment Highlights
PEM net sales were $1,659 billion, down 10.3% from the year-ago quarter. It lagged our estimate of $1,823 million. The segment posted a loss from operations of $211 million, wider than the $163 million loss a year ago, as a 3% decline in average sales price was only partly offset by margin benefits from footprint optimization and cost-saving actions.
Within PEM, performance materials net sales slipped primarily due to lower polyethylene and PVC resin pricing and lower PVC resin sales volume tied to footprint optimization. Essential materials net sales were down mainly due to lower chlorine and caustic soda sales volume. PEM margins began improving late in the quarter amid supply chain disruption tied to the Middle East conflict. Management pointed to significantly higher PVC resin and polyethylene sales prices after the closure of the Strait of Hormuz, driven by a steepening global cost curve from sharply higher global feedstock and energy prices.
HIP net sales were $993 million, essentially flat year over year. The figure missed our estimate of $1,047 million. Income from operations was $56 million, down $92 million, as lower average sales prices and margins, particularly in Pipe & Fittings, and lower sales volume (excluding the ACI acquisition), weighed on results.
Operationally, the quarter reflected a split backdrop. Management highlighted continued strength in infrastructure spending supporting pipe-and-fittings volumes, including demand tied to new data centers, while subdued North American residential construction activity and pricing pressure offset those benefits. Westlake also continues integrating ACI, acquired in January 2026, which management said improved HIP’s exposure to the high-voltage wire and cable market.
Financials
Net cash used for operating activities was $94 million in the first quarter. Capital expenditures were $209 million, implying a free cash outflow of $303 million for the period. As of March 31, 2026, cash, cash equivalents and fixed-income investments totaled $2.5 billion, while total debt was $5.6 billion.
Outlook
Westlake updated its 2026 view for HIP, saying revenue and EBITDA margin are now expected to be at the lower ends of its previously communicated ranges of $4.4 billion to $4.6 billion of sales and a 19% to 21% EBITDA margin. The company attributed the shift to slower residential construction activity in North America and rising costs tied to the Middle East conflict.
Management also emphasized that, in addition to the pricing and margin benefits of a steeper global cost curve, it anticipates further earnings improvement in the coming quarters as it continues executing against the profitability improvement plan.
Beyond near-term pricing and energy dynamics, management continues to lean on its three-pillar profitability improvement plan focused on footprint optimization, cost savings and improved plant reliability. Westlake reiterated that it is targeting a $600 million EBITDA uplift in 2026, and it expects the significant majority of that uplift to benefit the PEM segment.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 30.91% due to these changes.
VGM Scores
Currently, Westlake has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Westlake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.