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Westlake (WLK) Earnings and Revenues Surpass Estimates in Q1

Westlake Corporation WLK logged a profit of $394 million or $3.05 per share in the first quarter of 2023, down from $756 million or $5.83 per share in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of $2.05.

The results in the reported quarter were hurt by reduced average sales prices and integrated margins in performance materials and lower production and sales volumes, particularly in housing and infrastructure Products.

Sales fell around 17% year over year to $3,356 million in the quarter. It beat the Zacks Consensus Estimate of $3,317.9 million.

 

Westlake Corp. Price, Consensus and EPS Surprise

 

Westlake Corp. Price, Consensus and EPS Surprise
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 17% year over year to $2,349 million in the reported quarter. Operating income in the segment was $403 million, a roughly 54% year-over-year decline. The downside was due to lower average selling prices and integrated margins for Performance Materials and reduced sales volumes.

The Housing and Infrastructure Products segment generated sales of $1,007 million, down around 18% from the year-ago quarter. Operating income in the segment was $143 million, down around 23% from a year ago. The downside was due to reduced operating rates and sales volumes that more than offset lower raw material costs and higher average sales prices in most product categories.

Financial Position

Westlake ended the quarter with cash and cash equivalents of $2,414 million, up around 56% year over year. Long-term debt was $4,892 million, down roughly 0.2% year over year.

Net cash provided by operating activities was $512 million in the quarter.

Outlook

WLK noted that it is cautiously optimistic about the second quarter, which is typically its strongest of the year. It remains focused on areas within its control, including maintaining cost-focused culture. These include achieving cost synergies from recent acquisitions.

Price Performance

Westlake’s shares have declined 9.1% in a year compared with the industry’s 11.5% decline.

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Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

Westlake currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. STLD, PPG Industries, Inc. PPG and Linde plc LIN.

Steel Dynamics currently sports a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 24.3% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 10.7%, on average. STLD has gained around 29% in a year.

PPG Industries currently carries a Zacks Rank #2. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 11.7% upward in 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 6.8%, on average. PPG has gained around 10% in a year.

Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% upward in the past 60 days.

Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 21% in the past year.

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Westlake Corp. (WLK) : Free Stock Analysis Report

Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report

PPG Industries, Inc. (PPG) : Free Stock Analysis Report

Linde PLC (LIN) : Free Stock Analysis Report

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