Westlake Corporation WLK logged adjusted earnings of $2.01 per share for the second quarter of 2026, topping the Zacks Consensus Estimate of $1.93. Adjusted earnings improved sharply from an adjusted loss of 9 cents per share a year ago.
Net sales were $3.27 billion, which increased 10.8% year over year but missed the consensus mark of $3.28 billion marginally. Overall sales volume (excluding plant closures and the ACI acquisition) increased 7%, while average sales price rose 8% from the year-ago quarter.
Westlake Corporation Price, Consensus and EPS Surprise
WLK's Q2 Segment Highlights
Performance and Essential Materials (PEM) net sales were $2,019 million, up 13% from the year-ago quarter. It surpassed our estimate of $1,842.3 million. The segment posted operating income of $185 million versus a loss of $318 million a year ago, while EBITDA excluding identified items surged to $416 million from $52 million.
Within PEM, performance materials sales increased 21% year over year to $1,236 million and essential materials sales rose 2% to $783 million. Management attributed the improvement to significantly higher average sales prices, particularly for polyethylene and PVC resin, along with steady improvement in U.S. demand and better operating rates. Lower natural gas and ethane costs also benefited the EBITDA margin.
Housing and Infrastructure Products (HIP) net sales were $1,252 million, up 8% year over year and topped our estimate of $1,229.6 million. Operating income was $212 million, down 4.5% from $222 million a year ago, while EBITDA excluding identified items was essentially flat at $276 million.
Operationally, HIP benefited from strong double-digit Pipe & Fittings sales volume growth supported by infrastructure spending, including data centers. Housing Products sales increased 3% year over year, while disciplined pricing actions helped offset inflation in transportation and raw material costs.
WLK's Financials
Net cash provided by operating activities was $318 million in the second quarter. Capital expenditures were $207 million, resulting in free cash flow of $111 million. Westlake also reduced debt by $500 million and returned $99 million to shareholders through dividends and share repurchases. Cash, equivalents and investments totaled $1.9 billion.
Westlake’s 2026 Outlook
Westlake maintained its guidance for HIP revenue and EBITDA margin at the lower ends of the previously communicated ranges of $4.4 billion to $4.6 billion of sales and a 19% to 21% EBITDA margin.
Management said its three-pillar profitability improvement plan delivered roughly $150 million of year-over-year EBITDA benefit in the second quarter toward its $600 million full-year 2026 target.
The company expects the significant majority of the 2026 EBITDA uplift from the profitability improvement plan to benefit PEM. Management also expects improved reliability and production, which supported higher second-quarter sales volume, to continue in the second half of 2026.
WLK’s Stock Price Performance
Shares of Westlake have gained 0.7% in the past year compared with the Zacks Consumer Products - Discretionary industry’s 18.4% rise.
Image Source: Zacks Investment Research
WLK’s Zacks Rank & Key Picks
WLK currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Consumer Discretionary space are Newsmax Inc. NMAX, Kontoor Brands, Inc. KTB and H World Group Limited HTHT.
Newsmax is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for NMAX’s second-quarter loss is pegged at 2 cents per share. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
KTB is slated to report second-quarter results on Aug. 12. The Zacks Consensus Estimate for earnings is pegged at $1.06 per share. KTB has a Zacks Rank #2 at present.
H World Group is expected to report second-quarter results on Aug. 17. The Zacks Consensus Estimate for HTHT’s second-quarter earnings is pegged at 74 cents per share. It currently carries a Zacks Rank #2.
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