Westlake (WLK) Earnings Date & Reports

Westlake reported net sales of $2.652 billion for the first quarter ended March 31, 2026, a 7% decrease from $2.846 billion in Q1 2025 and below analyst expectations of $2.87 billion. The decline stemmed from lower average sales prices and slightly reduced volumes, partly offset by seasonal demand in HIP.

Net loss attributable to Westlake was $169 million, or $1.31 per diluted share, wider than the $40 million loss ($0.31 per share) in the prior year. Excluding $85 million in identified items—primarily a $67 million PVC pipe litigation settlement and $18 million facility shutdown charges—the adjusted loss was $100 million, or $0.77 per share, significantly missing consensus of -$0.22.

EBITDA totaled $150 million, up sequentially from Q4 2025's negative figure but down from $288 million in Q1 2025. Excluding items, EBITDA was $235 million (9% margin), versus $295 million last year.

HIP sales were $993 million with $186 million EBITDA excluding items (19% margin), down 8% in EBITDA year-over-year due to residential weakness but up 27% sequentially. PEM sales reached $1.659 billion with $36 million EBITDA excluding items (2% margin), down 55% year-over-year amid higher natural gas costs.

Cash and investments stood at $2.5 billion, with total debt at $5.6 billion as of quarter-end.

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Market Reaction and Investor Sentiment

Westlake's shares dropped sharply post-earnings, declining about 9% to around $104.78 after closing at $114.87 on May 4, 2026. The reaction reflected disappointment over the revenue miss of 7.7% and EPS shortfall of over 250% versus consensus. Investors interpreted weaker-than-expected demand in residential markets and persistent cost pressures as overriding positives like sequential EBITDA gains and a robust balance sheet. Sentiment turned cautious, with focus shifting to execution on cost-saving initiatives amid industry headwinds.

Forward Outlook and Key Factors to Monitor

Westlake management reaffirmed its three-pillar profitability improvement plan, targeting $600 million in EBITDA uplift for full-year 2026 through footprint optimization, cost savings, and enhanced plant reliability. Q1 progress contributed about $150 million toward this goal.

For the HIP segment, 2026 revenue is now expected at the lower end of $4.4–$4.6 billion, with EBITDA margins of 19–21% excluding items, reflecting a slow homebuilding start due to cold weather, higher interest rates, and rising costs for transportation and raw materials like PVC resin. Infrastructure demand remains supportive, driven by data center projects requiring pipe and fittings.

PEM margins are projected to improve from Middle East conflicts disrupting global feedstock and energy supplies, benefiting the cost curve through summer 2026. Capital expenditures are set at $900 million, aligning with depreciation, while cash interest expense is around $215 million.

Key factors to watch include progress on facility rationalizations, passthrough of cost inflation, export demand trends, and residential construction recovery. Geopolitical stability and natural gas prices will also influence margins.

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