Westlake Corp.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 30 October 2025: press release. Guidance figures: 1 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net loss driven by chlorovinyls impairment: Net loss attributable to Westlake was $782 million, or $6.06 per share, including identified items. Excluding them, the net loss was $38 million, or $0.29 per share, against net income of $183 million a year earlier. Source
• EBITDA excluding items fell sequentially: EBITDA excluding identified items was $313 million, down $27 million sequentially and $267 million from a year earlier. The margin was 11%. Source
• Year-over-year EBITDA decline drivers: Against the third quarter of 2024, the decline was attributed to lower average sales price and margin in PEM, lower PEM sales volume, and lower HIP price plus period-related expenses. Source
• PEM loss narrowed sequentially: PEM loss from operations excluding identified items was $158 million, against $188 million in the second quarter and $66 million of income a year earlier. Net sales were $1,747 million. Source
• PEM price down on PVC and export mix: Lower PVC resin prices and a higher share of export sales, where pricing is typically lower, drove the sequential decline in PEM average sales price. Source
• Identified items drove reported loss: Identified items totaled $744 million, comprising the goodwill impairment and $17 million of accrued expenses for previously announced asset shutdowns. Source

“Global macroeconomic conditions remained challenging throughout the third quarter of 2025 with continued weakness in industrial and manufacturing activity putting pressure on sales prices and margins in our PEM segment, particularly for chlorovinyls.”

Jean-Marc Gilson, President and Chief Executive Officer

Guidance

What changed from last quarter

• New: A non-cash goodwill impairment of $727 million fully wrote off the goodwill of the North American Chlorovinyls reporting unit in the PEM segment. Source
• New: Management said it will assess options to optimize the North American Chlorovinyls footprint to return the business to profitability. Source
• New guidance: A figure of about $100 million of annual losses removed from 2026 was given for the first time in this release. Source

Results and growth drivers

• Net loss driven by chlorovinyls impairment: Net loss attributable to Westlake was $782 million, or $6.06 per share, including identified items. Excluding them, the net loss was $38 million, or $0.29 per share, against net income of $183 million a year earlier. Source
• EBITDA excluding items fell sequentially: EBITDA excluding identified items was $313 million, down $27 million sequentially and $267 million from a year earlier. The margin was 11%. Source
• Year-over-year EBITDA decline drivers: Against the third quarter of 2024, the decline was attributed to lower average sales price and margin in PEM, lower PEM sales volume, and lower HIP price plus period-related expenses. Source
• Net loss worse than prior year: Excluding identified items, the net loss was $221 million larger than in the third quarter of 2024, mainly on lower price and margin, particularly in PEM. Source

Segments and regions

• HIP sales held near prior year: HIP net sales were $1,091 million, against $1,098 million a year earlier and $1,160 million in the second quarter. Housing Products was $928 million and Infrastructure Products $163 million. Source
• HIP income and margin declined: HIP income from operations was $151 million, against $222 million in the second quarter and $202 million a year earlier. The HIP EBITDA margin was 20%. Source
• PEM loss narrowed sequentially: PEM loss from operations excluding identified items was $158 million, against $188 million in the second quarter and $66 million of income a year earlier. Net sales were $1,747 million. Source
• PEM margin rose from low base: PEM EBITDA excluding identified items was $90 million, a 5% margin, against 3% in the second quarter and 15% a year earlier. Turnaround and outage impact was lower than in the second quarter. Source
• PEM price down on PVC and export mix: Lower PVC resin prices and a higher share of export sales, where pricing is typically lower, drove the sequential decline in PEM average sales price. Source
• PEM year-on-year price and volume fell: Against the third quarter of 2024, PEM average sales price fell 7%, particularly for PVC resin, and sales volume fell 6%, particularly for chlorine. Source

“We remain committed to this business as the global need for its products, which are critical to industries ranging from building materials to water to manufacturing, remains intact.”

Jean-Marc Gilson, President and Chief Executive Officer

Products and customers

• HIP positioned with large homebuilders: Management said HIP expects to keep outgrowing the market through product innovation and its preferred supplier position with large national homebuilders and distributors. Source
• HIP order timing shifted volume: The sequential HIP income decline reflected lower Pipe & Fittings and Building Products volume from customer order timing between the second and third quarters. Source

Costs, margins and pricing

• SG&A rose year on year: SG&A was $228 million, against $215 million a year earlier. Source
• Identified items drove reported loss: Identified items totaled $744 million, comprising the goodwill impairment and $17 million of accrued expenses for previously announced asset shutdowns. Source

“We believe that these actions will contribute to margins and earnings next year and for years to come,”

Jean-Marc Gilson, President and Chief Executive Officer

Demand and the order book

• Residential construction slowed, HIP steady: Management said HIP held sales in line with the prior-year period while North American residential construction activity was slowing. Source
• Industrial demand weakness hit PEM: Management described continued softness in industrial and manufacturing activity as affecting PEM sales prices and margins. Source

Capital, cash and returns to shareholders

• Cash flow negative in quarter: Operating cash flow was $182 million and capital expenditures were $239 million, giving free cash flow of negative $57 million. Source
• Nine-month free cash flow negative: Free cash flow for the first nine months was negative $514 million, against $157 million a year earlier. Source
• Liquidity and debt levels: Cash, equivalents and fixed-income investments were $2.1 billion. Of total debt, $750 million is classified as current. Source
• Dividends and buybacks year to date: Nine-month dividends paid were $204 million and treasury stock repurchases were $30 million; no senior notes were repaid in 2025. Source

Coming up, as management said on 30 October 2025

• Plant reliability expected to lift EBITDA: Management expects better plant reliability to improve EBITDA next year, with margins and earnings supported by profitability actions. Source

Figures management reported

Risks management discussed

• Demand: Management cited an unfavorable global supply-demand balance for many PEM products, tied to weaker global industrial and manufacturing demand, as a driver of lower prices and margins. Source
• Financial: Management said chlorovinyls earnings are below what the business can generate, and cost actions are intended to close that gap. Source

Earlier plans management reported on

• Not stated: The second-quarter release said Pernis closure cash outflows would run over several years after operations cease. The third-quarter release does not restate that timing.
• Not stated: The second-quarter release said chlorovinyls production would return to normal rates in the third quarter. The third-quarter release does not state whether it did.
• Not stated: The second-quarter release set a target of $200 million of additional cost reductions by 2026. The third-quarter release says management expects to achieve $200 million in 2026.

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.