Westlake Corp.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 5 May 2026: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Net loss excluding items was $100 million: Net loss excluding Identified Items was $100 million, or $0.77 per diluted share, on net sales of $2.7 billion. Reported net loss was $169 million, or $1.31 per share. Source
• EBITDA excluding items down year over year: EBITDA excluding Identified Items was $235 million, down $60 million from a year earlier and up $39 million from the fourth quarter. Reported EBITDA was $150 million. Source
• Identified Items were $85 million: Identified Items of $85 million comprised a $67 million litigation settlement and $18 million of facility shutdown charges, reducing EBITDA from $235 million to $150 million. Source
• PEM loss narrowed from fourth quarter: PEM loss from operations excluding items decreased by $28 million from the fourth quarter of 2025. Management attributed this mainly to a higher average sales price, particularly for polyethylene. Source
• Resin and polyethylene prices rose in March: After the Strait of Hormuz closed in March, PVC resin and polyethylene sales prices rose as the global cost curve steepened on higher feedstock and energy prices. Source
• PEM margins improved late in quarter: Management said PEM margin improvement began late in the first quarter as a result of the Iranian conflict. Source
• Operating cash use and capex: Net cash used for operating activities was $94 million in the first quarter, and capital expenditures were $209 million. Source

“we expect these factors to provide a meaningful benefit to PEM's margins through at least the summer of 2026”

Jean-Marc Gilson, President and Chief Executive Officer

What changed from last quarter

• New: The ACI acquisition closed in January 2026 and its sales are in Q1 results. The prior release expected HIP benefit from the January 2026 ACI acquisition. Source
• New: Management cited the March closure of the Strait of Hormuz as raising PVC resin and polyethylene prices. The prior release does not mention it. Source
• New: A $67 million settlement of litigation with direct purchasers of PVC pipe and fittings was recorded in the first quarter. Source

Results and growth drivers

• Net loss excluding items was $100 million: Net loss excluding Identified Items was $100 million, or $0.77 per diluted share, on net sales of $2.7 billion. Reported net loss was $169 million, or $1.31 per share. Source
• Prior-quarter comparison differs by release: This release shows the fourth quarter 2025 net loss excluding Identified Items at $131 million. The prior release reported $33 million for the same quarter. Source
• EBITDA excluding items down year over year: EBITDA excluding Identified Items was $235 million, down $60 million from a year earlier and up $39 million from the fourth quarter. Reported EBITDA was $150 million. Source
• Identified Items were $85 million: Identified Items of $85 million comprised a $67 million litigation settlement and $18 million of facility shutdown charges, reducing EBITDA from $235 million to $150 million. Source
• Sales volume rose on a sequential basis: Against the fourth quarter of 2025, company sales volume rose 6% excluding plant closures and acquisitions, while average sales price rose 1%. Source

Housing and PEM segment results

• HIP income down $24 million year over year: HIP income from operations excluding Identified Items was $124 million, down $24 million from a year earlier. HIP net sales were $993 million. Source
• HIP volume up 10%, price down 5%: HIP sales rose 10%. Volume rose 10% excluding the ACI acquisition, more than offset by a 5% decline in average sales price. Source
• PEM operating loss widened year over year: PEM loss from operations excluding Identified Items was $194 million, against $156 million a year earlier. PEM net sales were $1,659 million. Source
• PEM loss narrowed from fourth quarter: PEM loss from operations excluding items decreased by $28 million from the fourth quarter of 2025. Management attributed this mainly to a higher average sales price, particularly for polyethylene. Source
• Essential Materials sales fell on chlorine: Essential Materials net sales were $656 million, down $138 million from a year earlier, primarily on lower chlorine and caustic soda sales volume. Source

“we anticipate further earnings improvement in the coming quarters as we continue to execute against our three‑pillar profitability improvement plan”

Jean-Marc Gilson, President and Chief Executive Officer

Products, pricing and customers

• Resin and polyethylene prices rose in March: After the Strait of Hormuz closed in March, PVC resin and polyethylene sales prices rose as the global cost curve steepened on higher feedstock and energy prices. Source
• Pipe and fittings volumes increased: Pipe and Fittings sales volumes rose, which management linked to continued infrastructure spending. Source
• Infrastructure sales rose, housing sales fell: Infrastructure Products net sales were $205 million against $158 million a year earlier. Housing Products net sales were $788 million against $838 million. Source
• Performance Materials sales declined on price: Performance Materials net sales were $1.0 billion, down $53 million, on lower average sales price for polyethylene and PVC resin. Source

Costs, margins and pricing

• Natural gas costs below prior-year levels: North American natural gas costs declined from earlier-year levels on more favorable weather, according to management. Source
• Higher gas costs offset sequential gains: Sequentially, earnings were helped by the ACI acquisition and higher HIP volume, partly offset by higher natural gas costs. Source
• PEM margins improved late in quarter: Management said PEM margin improvement began late in the first quarter as a result of the Iranian conflict. Source
• PEM price decline partly offset by cost actions: PEM average sales price fell 3%. Margin benefits from footprint optimization and cost saving actions partly offset the decline. Source
• HIP margin pressure in pipe and fittings: The HIP year-over-year decrease reflected lower average sales price and margins, particularly in Pipe & Fittings, and lower volume excluding ACI. Source

Demand and end markets

• Data centers cited as demand driver: Management expects HIP sales volume to be supported by continued infrastructure spending, including demand from new data centers. Source
• Residential construction stayed subdued: Pipe and Fittings volume gains were more than offset by subdued North American residential construction activity and lower average sales prices. Source
• Affordability limits housing volume growth: Management said interest rates and rising building costs are likely to keep home affordability a headwind to sales volume growth. Source

Cash, capital and shareholder returns

• Operating cash use and capex: Net cash used for operating activities was $94 million in the first quarter, and capital expenditures were $209 million. Source
• Free cash flow was negative $303 million: Free cash flow was $(303) million, against $(325) million a year earlier and $(16) million in the fourth quarter of 2025. Source
• Cash and debt at quarter end: Cash, cash equivalents and fixed-income investments were $2.5 billion at March 31, 2026, against total debt of $5.6 billion. Source
• Acquisition used $62 million of cash: Acquisition of business, net of cash acquired, was $62 million in the quarter. Source
• No buybacks; dividends of $68 million: No common stock was repurchased in the quarter, compared with $30 million a year earlier. Dividends paid were $68 million. Source

Strategy, footprint and acquisitions

• ACI acquired January 2026: ACI was acquired in January 2026. Its Q1 sales are excluded from the volume comparisons in the supplemental tables. Source
• Shutdown charges across three product lines: Charges relate to previously announced facility shutdowns covering epoxy, North American chlorovinyls and styrene, alongside cost saving actions. Source
• 2025 cost reduction began to show: Management said the first quarter began to reflect cost reduction initiatives announced in 2025. Source

Coming up, as management said on 5 May 2026

• PEM margin benefit through summer: Management expects the margin benefit to PEM to last through at least the summer of 2026, given the factors it cited. Source

Figures management reported

Risks management discussed

• External: Management said the duration and severity of the feedstock and energy market impact from supply chain disruptions is uncertain. Source
• Demand: Management said interest rates and rising building costs are likely to keep home affordability a headwind to sales volume growth. Source
• Operational: PVC resin sales volume fell because of footprint optimization actions within Performance Materials. Source

Earlier plans management reported on

• Not stated: The prior release said the 2026 priority was achieving the PEM plan's targeted $600 million EBITDA improvement. This release does not restate progress.
• Not stated: Management said the first quarter began to reflect cost reduction initiatives announced in 2025, without a status label. Source
• Not stated: Management said it continues to execute the three-pillar plan, with further earnings improvement expected in coming quarters. Source

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 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.