WLK Q4 Earnings Beat, Sales Miss Amid Weak Volumes and Prices

Westlake Corporation WLK reported a loss of $544 million or $4.22 per share for the fourth quarter of 2025. This compares to a profit of $7 million or 6 cents per share in the year-ago quarter.

Barring one-time items, adjusted loss per share came in at 25 cents, narrower than the Zacks Consensus Estimate of a loss of $1.44.

Sales dipped around 10.9% year over year to $2,533 million in the quarter. It missed the Zacks Consensus Estimate of $2,567.4 million. The top line was negatively impacted by lower average sales price and lower sales volume.

The results in the fourth quarter were also hampered by higher feedstock and energy costs. The shutdown of three chlorovinyl production facilities and one styrene facility in North America resulted in noncash accelerated depreciation, amortization, and asset write-off charges. More significant impact from planned turnarounds and unplanned outages in 2025 also impacted full-year results.

Westlake Corporation Price, Consensus and EPS Surprise

Westlake Corporation price-consensus-eps-surprise-chart | Westlake Corporation Quote

WLK's Q4 Segment Highlights

Sales in the Performance and Essential Materials (PEM) segment went down around 12.4% year over year to $1,632 million in the reported quarter. It lagged our estimate of $1,652 million. Performance and Essential Materials' loss from operations in the fourth quarter of 2025 was $717 million compared with a loss of $41 million in the fourth quarter of 2024 due to lower selling prices of most major products, particularly for chlorine and polyethylene, and reduced sales volume, particularly for PVC resin, polyethylene and epoxy resin. Lower chlorine sales volume and average sales price, and lower caustic soda sales volume also weighed on the segment in 2025.

The Housing and Infrastructure Products (HIP) segment generated sales of $901 million, down around 8.1% from the year-ago quarter. The figure missed our estimate of $1,008 million. HIP’s income from operations in the fourth quarter of 2025 was $66 million, down $129 million from the fourth quarter of 2024. The year-over-year decline resulted from lower sales volume, especially for global compounds and lower margins.

WLK's Financial Position

Operating activities generated $225 million in net cash in the fourth quarter of 2025. Capital expenditures were $241 million. For the quarter, free cash outflow was $16 million. As of Dec. 31, 2025, the company's cash and cash equivalents were roughly $2.7 billion, with a long-term debt of $5.1 billion.

WLK's Outlook

Westlake expects its profitability to improve in 2026. The company continues to face challenges from weak global industrial and manufacturing activity. It is pushing its cost-cutting plans to offset these pressures. WLK is focusing on improving PEM profitability to reach the targeted $600 million in EBITDA improvement, while the HIP segment is expected to benefit from the January 2026 acquisition of ACI.

WLK’s Zacks Rank & Key Picks

WLK currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nexa Resources S.A. NEXA, Compania de Minas Buenaventura S.A.A. BVN and Avino Silver & Gold Mines Ltd. ASM.

Nexa Resources is scheduled to report fourth-quarter results on Feb. 26. The Zacks Consensus Estimate for NEXA’s fourth-quarter earnings is pegged at 45 cents, indicating 145% year over year growth. NEXA currently flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Buenaventura is slated to report fourth-quarter results on Feb. 26. The Zacks Consensus Estimate for earnings is pegged at 59 cents per share, indicating 353.85% year over year growth. It beat the consensus estimate in three of the last four quarters, with an average surprise of 28.02%. BVN sports a Zacks Rank #1 at present.

Avino Silver is slated to report fourth-quarter results on March 11. The consensus estimate for ASM’s earnings is pegged at 6 cents. ASM, presently carrying a Zacks Rank #2 (Buy), beat the consensus estimate in all the last four quarters, the average earnings surprise being 150%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research