Nov 4, 2026, 7:30 AM ETBasic Materials

Westlake Corporation — Third Quarter 2026 Earnings Summary

WLKWESTLAKE CORP

Financial Performance

Net sales for the three months ended September 30, 2026, were $2,981 million, compared to $2,838 million in the same period in 2025 and $3,271 million in the second quarter of 2026.
Net income attributable to Westlake Corporation was $6 million ($0.05 per diluted share) for the third quarter of 2026, compared to a net loss of $782 million ($6.06 per diluted share) in the third quarter of 2025 and net income of $260 million ($2.01 per diluted share) in the second quarter of 2026.
Net income excluding Identified Items was $58 million ($0.45 per diluted share) for the third quarter of 2026, compared to a net loss of $38 million ($0.29 per diluted share) in the third quarter of 2025.
EBITDA was $350 million for the third quarter of 2026, compared to a loss of $431 million in the third quarter of 2025 and $679 million in the second quarter of 2026.
EBITDA excluding Identified Items was $408 million for the third quarter of 2026, an increase from $313 million in the third quarter of 2025, with an EBITDA margin excluding Identified Items of 14% (up from 11% in 2025).
Net cash provided by operating activities was $408 million for the quarter; capital expenditures were $188 million, resulting in free cash flow of $220 million.
As of September 30, 2026, cash, cash equivalents, and fixed-income investments totaled $2.0 billion, while total debt was $5.1 billion.

The three-pillar profitability improvement plan remains on track to deliver $600 million of EBITDA uplift in 2026.
Management expects PEM selling prices to stabilize with upward momentum entering the fourth quarter of 2026, though an environment of heightened price volatility persists.
Higher borrowing costs are expected to weigh on HIP near-term sales volumes due to affordability concerns, but the medium- to long-term outlook for HIP sales and earnings growth remains positive, supported by infrastructure spending.
The company anticipates continuing to invest in attractive markets and return cash to shareholders through a dividend that has grown for 22 consecutive years since the 2004 IPO.

Housing and Infrastructure Products (HIP): Net sales were $1,087 million (down 1% from Q3 2025). Income from operations was $128 million (down $23 million year-over-year). Housing Products sales decreased $82 million to $846 million due to lower volume in roofing and siding & trim. Infrastructure Products sales increased $78 million to $241 million, driven by the January 2026 acquisition of ACI.
Performance and Essential Materials (PEM): Net sales were $1,894 million (up 8% from Q3 2025). Income from operations was a loss of $64 million (excluding Identified Items, a loss of $8 million), compared to a loss of $902 million in Q3 2025. Performance Materials sales increased $166 million to $1.2 billion due to higher average sales prices for polyethylene and PVC resin. Essential Materials sales decreased $19 million to $718 million due to lower caustic soda volume from plant shutdowns.
Acquisitions: The ACI acquisition contributed 5% to HIP sales in Q3 2026. The Wilhelmshaven acquisition contributed to PEM sales, partially offset by plant closures.
Plant Closures: PEM segment recorded $56 million in charges related to facility shutdowns (including Cologne PVC, North American chlorovinyls, and a styrene facility), and $2 million in other restructuring costs.

European chemical industry financial conditions deteriorated significantly due to higher energy costs, weak demand, and increasing imports from Asia.
The company is optimizing its European chlorovinyls footprint by integrating North American assets with the Wilhelmshaven facility and closing the higher-cost PVC plant in Cologne, Germany.
HIP sales volume declined 7% sequentially (excluding Wilhelmshaven) due to shifts between quarters and slowing residential construction activity.
PEM average sales price declined 8% sequentially as price increases from the onset of the Middle East conflict moderated, though prices remain above Q3 2025 levels and have recently inflected higher.
HIP margins were impacted by higher distribution costs, including diesel and freight.

Structural challenges in Europe include significantly higher energy costs, weak demand, and import pressure.
Higher borrowing costs impacting homebuyer affordability and residential construction activity.
Heightened price volatility in the PEM segment.
Increased costs for distribution, diesel, freight, and ethane.
General risks include raw material and energy cost volatility, geopolitical conflicts (Middle East, Russia, Ukraine), regulatory actions, and supply chain disruptions.

Jean-Marc Gilson, President and CEO, noted that results reflected lower North American construction activity, customer destocking in HIP, and lower selling prices/margins in PEM. He highlighted that despite headwinds, the company generated $220 million in free cash flow.
Gilson stated the company remains positive on the medium- to long-term outlook for HIP supported by infrastructure spending but recognizes the need for vigilance regarding price volatility and cost reduction.
Jon Baksht, CFO, emphasized the strength of the investment-grade balance sheet with $2.0 billion in cash and investments, supporting continued investment and a solid, growing dividend.

Identified Items for Q3 2026 included $56 million in charges for facility shutdowns and $2 million in other restructuring costs.
Identified Items for Q3 2025 included a $727 million non-cash impairment charge for North American Chlorovinyls goodwill and $17 million in shutdown charges.
The company acquired ACI in January 2026 and the Wilhelmshaven vinyls facility in June 2026.
The company announced the closure of its PVC plant in Cologne, Germany, to optimize its European footprint.
Dividends paid for the nine months ended September 30, 2026, were $205 million.
Repayment of senior notes totaled $496 million for the nine months ended September 30, 2026.
Common stock repurchases for treasury were $30 million for the nine months ended September 30, 2026.