Westlake Corp.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 4 November 2026: press release. Guidance figures: 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Reported net income $6 million; adjusted $58 million: Reported net income attributable to Westlake was $6 million, or $0.05 per share. Excluding Identified Items, net income was $58 million, or $0.45 per share, against a $38 million loss a year earlier. Source
• EBITDA excluding items up 30%: EBITDA excluding Identified Items was $408 million, up 30% from $313 million a year earlier. The margin excluding Identified Items rose from 11% to 14%. Source
• PEM sales rose on higher prices: PEM net sales were $1,894 million, up 8%, on a 9% higher average sales price and a 4% comparable volume increase, partly offset by plant closures. Source
• PEM loss narrowed year over year: PEM loss from operations excluding Identified Items was $8 million, against $158 million a year earlier. Management credited higher average sales price and profitability plan margin benefits. Source
• Company price up 6% year over year: Against the third quarter of 2025, company average sales price rose 6% and comparable volume was unchanged. Against the second quarter, price fell 4% and comparable volume fell 7%, excluding Wilhelmshaven. Source
• Cologne PVC plant to close: The company announced closure of its PVC plant in Cologne, Germany, removing higher-cost capacity from its European chlorovinyls system. Source
• Free cash flow $220 million: Operating cash flow was $408 million and capital expenditures were $188 million, leaving free cash flow of $220 million for the quarter. Source
• Affordability to weigh on HIP volumes: Management said higher borrowing costs have raised homebuyer affordability concerns, which it expects to weigh on HIP near-term sales volumes. Source

“Earnings in PEM's European businesses were significantly impacted by higher energy costs, weak demand, and increased import pressure from Asia.”

Jean‑Marc Gilson, President and Chief Executive Officer

Guidance

What changed from last quarter

• New: The company announced the closure of its PVC plant in Cologne, Germany, to remove higher-cost capacity from its European chlorovinyls system. Source
• New: Management cited a recent roofing acquisition, which the document does not describe further. Source
• Guidance kept: The $600 million plan target is kept. The metric is now described as EBITDA uplift, previously an operating income benefit. Source

Quarter results and drivers

• Reported net income $6 million; adjusted $58 million: Reported net income attributable to Westlake was $6 million, or $0.05 per share. Excluding Identified Items, net income was $58 million, or $0.45 per share, against a $38 million loss a year earlier. Source
• EBITDA excluding items up 30%: EBITDA excluding Identified Items was $408 million, up 30% from $313 million a year earlier. The margin excluding Identified Items rose from 11% to 14%. Source
• Sales and EBITDA down from second quarter: Net sales were $2,981 million, down from $3,271 million in the second quarter. Reported EBITDA was $350 million, compared with $679 million in the prior quarter. Source
• Prior-year impairment drove Identified Items: A $727 million non-cash goodwill impairment on North American Chlorovinyls was the main Identified Item in the year-earlier quarter. Source

Housing and Infrastructure Products

• HIP sales flat on acquisition offset: HIP net sales were $1,087 million, essentially flat, as a 6% comparable volume decline offset a 1% price gain and a 5% contribution from ACI. Source
• HIP income and margin declined: HIP income from operations was $128 million, down $23 million. EBITDA margin excluding Identified Items was 18%, against 20% a year earlier. Source
• HIP volume fell 17% sequentially: HIP sales volume fell 17% from the second quarter. Management attributed this to volume shifts between quarters and slowing residential construction. Source
• Infrastructure growth from ACI acquisition: Infrastructure Products sales were $241 million, up $78 million, mainly from the January 2026 ACI acquisition. Housing Products sales were $846 million, down $82 million, mainly on lower roofing and siding and trim volume. Source

“Despite these headwinds, Westlake generated $220 million of free cash flow during the quarter, in part due to the benefits from our three-pillar profitability improvement plan, which remains on track to deliver $600 million of EBITDA uplift in 2026”

Jean‑Marc Gilson, President and Chief Executive Officer

Performance and Essential Materials

• PEM sales rose on higher prices: PEM net sales were $1,894 million, up 8%, on a 9% higher average sales price and a 4% comparable volume increase, partly offset by plant closures. Source
• PEM loss narrowed year over year: PEM loss from operations excluding Identified Items was $8 million, against $158 million a year earlier. Management credited higher average sales price and profitability plan margin benefits. Source
• PEM income fell sequentially on prices: PEM loss from operations was $193 million lower than the second quarter. Management cited lower average sales price for PVC resin and polyethylene, and higher European energy costs. Source
• Performance Materials rose, Essential Materials fell: Performance Materials sales were $1.2 billion, up $166 million on higher polyethylene and PVC resin prices. Essential Materials sales were $718 million, down $19 million on lower caustic soda volume. Source

Pricing and volume

• Company price up 6% year over year: Against the third quarter of 2025, company average sales price rose 6% and comparable volume was unchanged. Against the second quarter, price fell 4% and comparable volume fell 7%, excluding Wilhelmshaven. Source
• PEM price eased after second-quarter spike: PEM average sales price fell 8% sequentially as second quarter increases from the Middle East conflict moderated. Prices remained above third quarter 2025 levels and have recently risen off the quarter's lows. Source
• Volume by segment excluding closures: Excluding plant closures and the ACI and Wilhelmshaven acquisitions, year-over-year HIP volume fell 6% and PEM volume rose 4%, with company volume unchanged. Source

“Our investment-grade rated balance sheet, with $2.0 billion of cash and investments at the end of the third quarter continues to be a differentiated source of strength for Westlake”

Jon Baksht, Senior Vice President and Chief Financial Officer

Costs and margins

• Distribution and ethane costs offset gains: Earnings benefited from higher PEM price and margin, the profitability plan and ACI. Higher distribution and ethane costs partly offset those gains. Source
• Diesel and freight costs hit HIP margins: Management said HIP's third quarter margins were also affected by higher diesel and freight costs. Source
• European energy costs and imports weighed: Management said financial conditions for the European chemical industry deteriorated meaningfully in the quarter, citing higher energy costs, demand and rising imports. Source

European footprint and closures

• Cologne PVC plant to close: The company announced closure of its PVC plant in Cologne, Germany, removing higher-cost capacity from its European chlorovinyls system. Source
• Wilhelmshaven to integrate with North America: Management said it is taking action to optimize its European chlorovinyls footprint by integrating North American chlorovinyls assets with the Wilhelmshaven vinyls facility. Source
• $56 million facility shutdown charges: PEM recorded $56 million of charges tied to previously announced shutdowns, covering the Cologne PVC plant, certain North American chlorovinyls facilities and a styrene facility. Source

Cash, debt and shareholder returns

• Free cash flow $220 million: Operating cash flow was $408 million and capital expenditures were $188 million, leaving free cash flow of $220 million for the quarter. Source
• Cash $2.0 billion, total debt $5.1 billion: Cash, cash equivalents and fixed-income investments were $2.0 billion at quarter end, and total debt was $5.1 billion. Source
• Dividend grown 22 consecutive years: Management said the company continues to return cash through a dividend that has grown for 22 consecutive years since the 2004 IPO. Source

Demand and housing conditions

• Affordability to weigh on HIP volumes: Management said higher borrowing costs have raised homebuyer affordability concerns, which it expects to weigh on HIP near-term sales volumes. Source
• Infrastructure supports medium-term HIP growth: Management said it remains positive on medium- to long-term HIP sales and earnings growth, supported by growth segments and infrastructure spending. Source
• PEM prices stabilized, volatility persists: Management said PEM selling prices have stabilized with upward momentum entering the fourth quarter, while heightened price volatility persists. Source
• Destocking and residential slowdown in HIP: Management said the quarter reflected lower North American residential construction and customer inventory destocking in HIP, combined with lower PEM selling prices and margins. Source

Coming up, as management said on 4 November 2026

• PEM prices into fourth quarter: Management said PEM selling prices have upward momentum entering the fourth quarter of 2026. Source
• Plan targets $600 million in 2026: Management said the three-pillar plan is on track to deliver $600 million of EBITDA uplift in 2026. Source

Figures management reported

Risks management discussed

• Demand: Higher borrowing costs raised homebuyer affordability concerns, which management expects to weigh on HIP near-term sales volumes. Source
• External: Management said heightened price volatility persists in PEM markets and requires continued cost and footprint actions. Source
• Demand: Management said European PEM earnings were affected by higher energy costs, weak demand and increased import pressure from Asia. Source
• Operational: Higher distribution and ethane costs were named as partial offsets to the year-over-year earnings gains. Source

Earlier plans management reported on

• On track: Management said the plan remains on track to deliver $600 million of EBITDA uplift in 2026. Source
• Not stated: The quarter included charges for facility shutdowns that management had previously announced; no status was given. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 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.