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WESTLAKE CORP

WESTLAKE CORP (WLK) Q1 2026 Earnings Call Transcript

Bullish Specialty Chemicals 11.82B USA
Next Earnings
2026-04-30

Westlake Corporation manufactures and markets performance and essential materials, and housing and infrastructure products in the United States, Canada, Germany, China, Mexico, Brazil, France, Italy, and internationally. The Performance and Essential Materials segment offers ethylene, polyethylene, styrene, chlor-alkali, chlorinated derivative products, ethylene dichloride, vinyl chloride monomer, polyvinyl chloride (PVC), epoxy specialty resins, and base epoxy resins and intermediaries. The Housing and Infrastructure Products segment provides residential PVC sidings; PVC trim and mouldings; architectural stone veneers; windows; PVC decking; PVC films for various inflatables, wallcovering, and tape and roofing applications; polymer composite and cement roof tiles; PVC pipes and fittings for various water, sewer, electrical, and industrial applications; and PVC compounds for various housing, medical, and automobile products. This segment also offers consumer and commercial products, such as landscape edging; industrial, home, and office matting; marine dock edging; and masonry joint controls. It offers its products to chemical processors; plastics fabricators; small construction contractors; municipalities; and supply warehouses for use in various consumer and industrial markets, including residential construction, flexible and rigid packaging, automotive products, healthcare products, water treatment, wind turbines, and coatings, as well as other durable and non-durable goods. The company was formerly known as Westlake Chemical Corporation and changed its name to Westlake Corporation in February 2022. Westlake Corporation was founded in 1986 and is headquartered in Houston, Texas. Westlake Corporation is a subsidiary of TTWF LP.

Westlake guides to a 2026 EBITDA uplift of $600 million from a three-pillar plan, after completing 2025 restructurings and targeting improved plant reliability, with a cautious but optimistic view on demand recovery.

⭐ Key Highlights

Three-pillar earnings improvement plan
Westlake expects a $600 million EBITDA boost in 2026 from footprint optimization, reliability improvements, and further structural cost reductions.
Significant 2025 cost actions completed
In 2025, Westlake delivered $170 million of structural cost reductions and closed multiple high-cost PEM assets, reducing exposure to low-priced export markets.
Financial results overview
Q4 2025 net loss of $33 million on $2.5 billion sales; full-year 2025 net loss of $116 million and EBITDA of $1.10 billion.
PMI-driven demand backdrop and 2026 outlook
Management cites signs of macro improvement (ISM 53 in Jan) and expects 2026 demand to rebound with projected HIP revenue of $4.4–$4.6 billion and 19–21% EBITDA margin.
A new profitability inflection point in 2026
Firm guidance and structural actions position Westlake to generate meaningful cash flow and higher utilization in both HIP and PEM, with capex ~$900 million and targeted net cash generation.
Leadership transition
CFO Mark Bender announced planned retirement later in 2026, with transition to a new CFO.

✔Positive Signals

  • Three-pillar plan expected to deliver $600 million EBITDA uplift in 2026.
  • Structural cost reductions of $170 million realized in 2025.
  • ACI acquisition expanding HIP product breadth and cross-linked polymer capabilities.
  • Sustainability progress: 2024 emissions reduction achieved six years early.
  • Strong balance sheet: $2.9 billion cash and securities and 16-year average debt maturity.

✖Negative Signals

  • 2025 net loss of $116 million and Q4 2025 net loss of $33 million.
  • PEM profitability pressured by global overcapacity and lower selling prices.
  • Identified items totaling $511 million (inventory write-offs and shutdowns) excluded from non-GAAP results.
  • Ongoing macro uncertainty and dependency on housingStarts rebound to drive HIP volumes.
  • CFO retirement planned for 2026 introduces leadership transition risk.

📊Financial Results

  • Full-year 2025 sales: $11.2 billion, down 8% vs 2024.
  • Full-year 2025 EBITDA: $1.10 billion; 2025 net loss: $116 million.
  • Q4 2025 net loss: $33 million on $2.5 billion revenue.
  • HIP full-year 2025 EBITDA: $839 million, margin 20%.
  • PEM full-year 2025 EBITDA: $267 million.

🔮Future Guidance

  • HIP 2026 revenue guidance: $4.4–$4.6 billion with EBITDA margin 19–21%.
  • 2026 capital expenditures expected to be about $900 million (down from 2025).
  • 2026 effective tax rate targeted around 17%.
  • Cash interest expense expected around $215 million.
  • Three-pillar plan to deliver $600 million in 2026 EBITDA; ongoing cost reductions to be pursued beyond 2025 actions, with incremental benefits from reliability improvements.

💡Interesting Insights

  • Management emphasized that municipal pipe demand can occur outside HIP subsegment classifications, highlighting mix effects within HIP.
  • PMI improvement and lower mortgage rates are cited as drivers for potential 2026 volume rebound, signaling macro-driven upside beyond product innovations.

Detailed Analysis

AI-generated summary of WESTLAKE CORP earnings call transcript.

Westlake completed a substantial restructuring in 2025, including closing high-cost PEM assets and implementing the three-pillar strategy—footprint optimization, reliability improvements, and additional structural cost cuts—to target a $600 million EBITDA increase in 2026. The company reported a Q4 2025 net loss of $33 million on $2.5 billion in sales and a full-year 2025 net loss of $116 million with EBITDA of $1.1 billion. HIP performed relatively well in Q4 amid seasonality, while PEM faced ongoing margin compression from global overcapacity and lower prices, though price actions in PVC and caustics show early signs of improvement. Management outlined 2026 guidance for HIP revenue of $4.4–$4.6 billion with 19–21% EBITDA margin, capex of about $900 million, and an expected 17% effective tax rate, supported by an anticipated rebound in housing starts and the ACI acquisition expanding product offerings. The CFO transition was announced, signaling an important leadership change. Overall, the call framed 2026 as an inflection year, with ongoing cost discipline and operational improvements expected to drive cash generation and value creation, despite a challenging 2025 backdrop.

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