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Westlake Corporation Reports Third Quarter 2022 Results

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Westlake Corporation (NYSE: WLK) reported third quarter 2022 results, showing a net income of $401 million, or $3.10 per share, down from $607 million a year ago. EBITDA fell to $804 million, reflecting a margin compression due to rising energy costs and lower integrated product margins. Net sales were $4.0 billion, impacted by eroding macroeconomic conditions and decreased industrial activity. A $70 million legal charge also affected earnings. The Housing and Infrastructure Products segment saw improved performance, while the Performance and Essential Materials segment faced challenges.

Positive
  • Housing and Infrastructure Products income from operations increased by $83 million year-over-year.
  • Cash flow from operations for the nine months ending September 30, 2022, was $2,560 million, an increase of $923 million from the prior year.
  • Higher sales prices for caustic soda and polyethylene volumes partially offset revenue declines.
Negative
  • Net income decreased by $206 million year-over-year due to lower global sales prices and higher energy costs.
  • EBITDA fell by $273 million compared to Q3 2021 and by $652 million sequentially.
  • Performance and Essential Materials income from operations dropped by $416 million year-over-year.

HOUSTON--(BUSINESS WIRE)-- Westlake Corporation (NYSE: WLK) (the "Company" or "Westlake") today announced third quarter 2022 results.

SUMMARY FINANCIAL HIGHLIGHTS ($ in millions except per share data)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Westlake Corporation

 

 

 

 

 

 

 

 

Income from operations

 

$

516

 

$

861

 

$

2,723

 

$

1,927

Net income attributable to Westlake Corporation

 

$

401

 

$

607

 

$

2,015

 

$

1,371

Diluted earnings per common share

 

$

3.10

 

$

4.69

 

$

15.54

 

$

10.60

EBITDA

 

$

804

 

$

1,077

 

$

3,560

 

$

2,562

EBITDA margin

 

 

20%

 

 

35%

 

 

28%

 

 

31%

 

 

 

 

 

 

 

 

 

Performance and Essential Materials ("PEM") Segment

 

 

 

 

 

 

 

 

Net external sales

 

$

2,711

 

$

2,322

 

$

8,647

 

$

6,210

Income from operations

 

$

353

 

$

769

 

$

2,197

 

$

1,728

EBITDA

 

$

561

 

$

946

 

$

2,794

 

$

2,250

EBITDA margin

 

 

21%

 

 

41%

 

 

32%

 

 

36%

 

 

 

 

 

 

 

 

 

Housing and Infrastructure Products ("HIP") Segment

 

 

 

 

 

 

 

 

Net external sales

 

$

1,245

 

$

733

 

$

3,848

 

$

2,061

Income from operations

 

$

186

 

$

103

 

$

607

 

$

270

EBITDA

 

$

254

 

$

137

 

$

822

 

$

372

EBITDA margin

 

 

20%

 

 

19%

 

 

21%

 

 

18%

BUSINESS HIGHLIGHTS

In the third quarter of 2022, Westlake achieved net sales of $4.0 billion, net income of $401 million and EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $804 million. During the quarter, the Company was impacted by eroding macro-economic conditions and decreased industrial activity; higher global energy prices, especially in Europe; and slowing U.S. residential construction in response to rapidly rising interest rates and ongoing inflation; while benefitting from strengthening market conditions for caustic soda. Third quarter 2022 earnings for the Company was also impacted by a $70 million charge recorded in cost of sales, or $0.42 per share, after-tax, related to pending litigation (the "Legal Charge").

Earnings per share were $3.10, compared to $4.69 in the year-ago period and $6.60 in the prior quarter, reflecting margin compression due to higher energy costs, particularly in Europe, lower integrated product margins, and changes in product sales mix.

Performance and Essential Materials net pricing decreased 7% from the second quarter of 2022 while Housing and Infrastructure Products net pricing increased by 2%. Overall sales prices for the Company decreased 4% sequentially from the previous quarter.

Sales volumes for Performance and Essential Materials decreased 6% from second quarter 2022 while sales volumes for Housing and Infrastructure Products decreased 12%. Overall sales volumes for the Company decreased 8% sequentially from the previous quarter.

EXECUTIVE COMMENTARY

"The third quarter saw significant erosion in global macroeconomic indicators and sentiment. The rapid rise in global fuel and power prices continued, which, along with inflationary pressures, impacted global demand across our businesses, and particularly our European operations. Significant economic headwinds and slowing industrial activity in Europe were compounded by lagging growth in Asia and a meaningful drop in residential construction activity in North America. Combined, these effects led to diminished demand across our businesses and lower prices for many of our products," said Albert Chao, President and Chief Executive Officer.

"We believe we are well positioned to weather the near-term volatility in the global economy and are confident in the fundamentals of our businesses. With approximately 85% of our Performance and Essential Materials capacity concentrated in North America, we will continue to benefit from the North American producers' structural cost advantage in feedstocks, fuel and power, as well as a strengthening market for caustic soda. While we expect to continue to be impacted by high energy prices and softer global demand, we have the ability to scale our operations to meet market conditions. In Housing and Infrastructure Products, we have seen slowing residential construction as the market responds to rapidly rising interest rates. While we expect to see seasonally softer demand from new home construction in the fourth quarter, our business should be buoyed by continuing repair and remodeling activity and infrastructure spending in areas such as municipal water systems, agricultural irrigation and global transportation. Our advantaged cost position, asset mix, and derivative flexibility enable us to optimize our business," concluded Mr. Chao.

RESULTS

Consolidated Results

For the three months ended September 30, 2022, the Company reported quarterly net income of $401 million, or $3.10 per share, on net sales of $3,956 million. The year-over-year decrease in net income of $206 million from the third quarter of 2021 was primarily due to lower global sales prices and integrated margins for our Performance Materials, lower global production and sales volumes for chlorovinyls, higher global fuel and power costs, and the $70 million Legal Charge. These impacts were partially offset by higher sales prices for caustic soda, higher sales volumes for polyethylene, lower interest expense and a lower effective tax rate.

Third quarter 2022 net income of $401 million decreased by $457 million sequentially as compared to the second quarter of 2022. The sequential decrease in net income compared to the prior quarter was primarily due to lower global sales prices and integrated margins in our Performance Materials business, lower production and sales volumes for both segments, higher global fuel and power costs, and the Legal Charge. These impacts were partially offset by higher sales prices for caustic soda and many of our housing and infrastructure products and a lower effective tax rate.

EBITDA of $804 million for the third quarter of 2022 decreased by $273 million compared to third quarter 2021 EBITDA of $1.1 billion. Third quarter 2022 EBITDA decreased by $652 million compared to second quarter 2022 EBITDA of $1.5 billion.

Cash and Debt

Net cash provided by operating activities was $947 million for the third quarter of 2022. For the nine months ending September 30, 2022, cash flow from operations was $2,560 million and free cash flow (net cash provided by operating activities less capital expenditures) was $1,749 million, an increase of $923 million and $526 million from the prior-year period, respectively. As of September 30, 2022, cash and cash equivalents were $1,778 million and total debt was $4,819 million. Capital expenditures for the third quarter and first nine months of 2022 were $318 million and $811 million, respectively.

A reconciliation of EBITDA to net income, income from operations and net cash provided by operating activities as well as a reconciliation of free cash flow to net cash flow provided by operating activities can be found in the financial schedules at the end of this press release.

Performance and Essential Materials Segment

Performance and Essential Materials income from operations of $353 million for the third quarter of 2022 decreased by $416 million compared to the third quarter of 2021. This year-over-year decrease was primarily driven by lower sales prices and integrated margins for our Performance Materials business (largely polyethylene and PVC resin), lower chlorovinyls production and sales volumes, higher global fuel and power prices, and the $70 million Legal Charge. These decreases were partially offset by higher global sales prices for caustic soda and higher polyethylene sales volumes.

Sequentially, Performance and Essential Materials income from operations decreased by $612 million as compared to the second quarter of 2022. The sequential decrease was largely due to lower sales prices and integrated margins for our Performance Materials business, lower production rates and sales volume in chlorovinyls and epoxy resin, as well as higher global fuel and power prices, and the Legal Charge. These decreases were partially offset by higher global sales prices for caustic soda and higher polyethylene sales volumes.

Housing and Infrastructure Products Segment

For the third quarter of 2022, Housing and Infrastructure Products income from operations of $186 million increased by $83 million as compared to the third quarter of 2021. The year-over-year increase was the result of higher sales prices across all product categories as well as contributions from businesses acquired in the second half of 2021.

Sequentially, Housing and Infrastructure Products income from operations decreased by $50 million as compared to the second quarter of 2022. This decrease in income from operations versus the prior quarter was the result of lower production and sales volumes partially offset by higher sales prices.

Forward-Looking Statements

The statements in this release and the related teleconference relating to matters that are not historical facts, including statements regarding our outlook for our business segments, our belief that we will benefit from having high integration and a structural cost-advantage in North America, our expectations regarding repair and remodeling activity and infrastructure spending, our ability to weather economic volatility, higher energy prices, our market position, our ability to scale operations, the contribution of recent acquisitions and global demand for our products, are forward-looking statements. These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: the COVID-19 pandemic and the response thereto; general economic and business conditions; the cyclical nature of the industry; availability, cost and volatility of raw materials and utilities, including natural gas and natural gas liquids from shale production; the price of crude oil; uncertainties associated with the United States and worldwide economies, including those due to global economic and financial conditions; governmental regulatory actions, including environmental regulation and changes in trade policies; political unrest; industry production capacity and operating rates; the supply/demand balance for Westlake's products; competitive products and pricing pressures; access to capital markets; technological developments; the effect and results of litigation and settlements of litigation; operating interruptions; the ability to integrate the recent acquisitions; the diversion of management time on transaction-related issues; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake's Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC in February 2022, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, which was filed with the SEC in August 2022.

Use of Non-GAAP Financial Measures

This release makes reference to certain "non-GAAP" financial measures, such as EBITDA and free cash flow, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We report our financial results in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), but believe that certain non-GAAP financial measures, such as EBITDA and free cash flow, provide useful supplemental information to investors regarding the underlying business trends and performance of the Company's ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with U.S. GAAP. A reconciliation of (i) EBITDA to net income, income from operations and net cash provided by operating activities and (ii) free cash flow to net cash provided by operating activities can be found in the financial schedules at the end of this press release.

About Westlake

Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in Houston, with operations in Asia, Europe and North America, we provide the building blocks for vital solutions — from housing and construction, to packaging and healthcare, to automotive and consumer. For more information, visit the Company's web site at www.westlake.com.

Westlake Corporation Conference Call Information:

A conference call to discuss Westlake Corporation's third quarter 2022 results will be held Thursday, November 3, 2022 at 11:00 AM Eastern Time (10:00 AM Central Time). To access the conference call, it is necessary to pre-register at https://register.vevent.com/register/BId53ccc41b34744e19fa224843ba1fcb6. Once registered, you will receive a phone number and unique PIN number.

A replay of the conference call will be available beginning two hours after its conclusion. The conference call and replay will be available via webcast at https://edge.media-server.com/mmc/p/phzpfjoh.

WESTLAKE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

(In millions of dollars, except per share data and share amounts)

Net sales

 

$

3,956

 

 

$

3,055

 

 

$

12,495

 

 

$

8,271

 

Cost of sales

 

 

3,180

 

 

 

2,037

 

 

 

8,989

 

 

 

5,872

 

Gross profit

 

 

776

 

 

 

1,018

 

 

 

3,506

 

 

 

2,399

 

Selling, general and administrative expenses

 

 

215

 

 

 

122

 

 

 

635

 

 

 

383

 

Amortization of intangibles

 

 

39

 

 

 

29

 

 

 

124

 

 

 

83

 

Restructuring, transaction and integration-related costs

 

 

6

 

 

 

6

 

 

 

24

 

 

 

6

 

Income from operations

 

 

516

 

 

 

861

 

 

 

2,723

 

 

 

1,927

 

Interest expense

 

 

(44

)

 

 

(61

)

 

 

(134

)

 

 

(130

)

Other income, net

 

 

24

 

 

 

13

 

 

 

52

 

 

 

35

 

Income before income taxes

 

 

496

 

 

 

813

 

 

 

2,641

 

 

 

1,832

 

Provision for income taxes

 

 

84

 

 

 

193

 

 

 

592

 

 

 

423

 

Net income

 

 

412

 

 

 

620

 

 

 

2,049

 

 

 

1,409

 

Net income attributable to noncontrolling interests

 

 

11

 

 

 

13

 

 

 

34

 

 

 

38

 

Net income attributable to Westlake Corporation

 

$

401

 

 

$

607

 

 

$

2,015

 

 

$

1,371

 

Earnings per common share attributable to Westlake Corporation:

 

 

 

 

 

 

 

 

Basic

 

$

3.12

 

 

$

4.71

 

 

$

15.65

 

 

$

10.65

 

Diluted

 

$

3.10

 

 

$

4.69

 

 

$

15.54

 

 

$

10.60

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

127,943,400

 

 

 

128,060,193

 

 

 

128,118,160

 

 

 

128,053,337

 

Diluted

 

 

128,747,012

 

 

 

128,765,814

 

 

 

129,003,750

 

 

 

128,710,097

 

WESTLAKE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

September 30,
2022

 

December 31,
2021

 

 

 

 

 

 

 

(In millions of dollars)

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

1,778

 

$

1,908

Accounts receivable, net

 

 

2,181

 

 

 

1,868

 

Inventories

 

 

2,024

 

 

 

1,407

 

Prepaid expenses and other current assets

 

 

118

 

 

 

80

 

Total current assets

 

 

6,101

 

 

 

5,263

 

Property, plant and equipment, net

 

 

8,301

 

 

 

7,606

 

Other assets, net

 

 

6,023

 

 

 

5,590

 

Total assets

 

$

20,425

 

 

$

18,459

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities (accounts payable and accrued and other liabilities)

 

$

2,455

 

 

$

2,075

 

Current portion of long-term debt, net

 

 

6

 

 

 

269

 

Long-term debt, net

 

 

4,813

 

 

 

4,911

 

Other liabilities

 

 

2,963

 

 

 

2,676

 

Total liabilities

 

 

10,237

 

 

 

9,931

 

Total Westlake Corporation stockholders' equity

 

 

9,621

 

 

 

7,955

 

Noncontrolling interests

 

 

567

 

 

 

573

 

Total equity

 

 

10,188

 

 

 

8,528

 

Total liabilities and equity

 

$

20,425

 

 

$

18,459

 

WESTLAKE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

 

 

 

 

 

 

(In millions of dollars)

Cash flows from operating activities

 

 

 

 

Net income

 

$

2,049

 

 

$

1,409

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

785

 

 

 

600

 

Deferred income taxes

 

 

44

 

 

 

50

 

Net loss on disposition and others

 

 

86

 

 

 

58

 

Other balance sheet changes

 

 

(404

)

 

 

(480

)

Net cash provided by operating activities

 

 

2,560

 

 

 

1,637

 

Cash flows from investing activities

 

 

 

 

Acquisition of business, net of cash acquired

 

 

(1,171

)

 

 

(428

)

Additions to investments in unconsolidated subsidiaries

 

 

(177

)

 

 

(19

)

Additions to property, plant and equipment

 

 

(811

)

 

 

(414

)

Other, net

 

 

11

 

 

 

19

 

Net cash used for investing activities

 

 

(2,148

)

 

 

(842

)

Cash flows from financing activities

 

 

 

 

Debt issuance costs

 

 

 

 

 

(18

)

Distributions to noncontrolling interests

 

 

(34

)

 

 

(32

)

Dividends paid

 

 

(123

)

 

 

(107

)

Proceeds from debt issuance

 

 

 

 

 

1,668

 

Repayment of senior notes

 

 

(250

)

 

 

 

Repurchase of common stock for treasury

 

 

(68

)

 

 

(30

)

Other, net

 

 

(5

)

 

 

6

 

Net cash provided by (used for) financing activities

 

 

(480

)

 

 

1,487

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(67

)

 

 

(9

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(135

)

 

 

2,273

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

1,941

 

 

 

1,337

 

Cash, cash equivalents and restricted cash at end of period

 

$

1,806

 

 

$

3,610

 

WESTLAKE CORPORATION

SEGMENT INFORMATION

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

(In millions of dollars)

Net external sales

 

 

 

 

 

 

 

 

Performance and Essential Materials

 

 

 

 

 

 

 

 

Performance Materials

 

$

1,689

 

 

$

1,588

 

 

$

5,678

 

 

$

4,333

 

Essential Materials

 

 

1,022

 

 

 

734

 

 

 

2,969

 

 

 

1,877

 

Total Performance and Essential Materials

 

 

2,711

 

 

 

2,322

 

 

 

8,647

 

 

 

6,210

 

Housing and Infrastructure Products

 

 

 

 

 

 

 

 

Housing Products

 

 

1,018

 

 

 

536

 

 

 

3,106

 

 

 

1,491

 

Infrastructure Products

 

 

227

 

 

 

197

 

 

 

742

 

 

 

570

 

Total Housing and Infrastructure Products

 

 

1,245

 

 

 

733

 

 

 

3,848

 

 

 

2,061

 

 

 

$

3,956

 

 

$

3,055

 

 

$

12,495

 

 

$

8,271

 

Income (loss) from operations

 

 

 

 

 

 

 

 

Performance and Essential Materials

 

$

353

 

 

$

769

 

 

$

2,197

 

 

$

1,728

 

Housing and Infrastructure Products

 

 

186

 

 

 

103

 

 

 

607

 

 

 

270

 

Corporate and other

 

 

(23

)

 

 

(11

)

 

 

(81

)

 

 

(71

)

 

 

$

516

 

 

$

861

 

 

$

2,723

 

 

$

1,927

 

Depreciation and amortization

 

 

 

 

 

 

 

 

Performance and Essential Materials

 

$

196

 

 

$

168

 

 

$

572

 

 

$

497

 

Housing and Infrastructure Products

 

 

65

 

 

 

34

 

 

 

206

 

 

 

98

 

Corporate and other

 

 

3

 

 

 

1

 

 

 

7

 

 

 

5

 

 

 

$

264

 

 

$

203

 

 

$

785

 

 

$

600

 

Other income, net

 

 

 

 

 

 

 

 

Performance and Essential Materials

 

$

12

 

 

$

9

 

 

$

25

 

 

$

25

 

Housing and Infrastructure Products

 

 

3

 

 

 

 

 

 

9

 

 

 

4

 

Corporate and other

 

 

9

 

 

 

4

 

 

 

18

 

 

 

6

 

 

 

$

24

 

 

$

13

 

 

$

52

 

 

$

35

 

WESTLAKE CORPORATION

RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND

NET CASH PROVIDED BY OPERATING ACTIVITIES

(Unaudited)

 

 

 

Three Months
Ended June 30,

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions of dollars, except percentages)

Net cash provided by operating activities

 

$

913

 

 

$

947

 

 

$

755

 

 

$

2,560

 

 

$

1,637

 

Changes in operating assets and liabilities and other

 

 

(1

)

 

 

(572

)

 

 

(109

)

 

 

(467

)

 

 

(178

)

Deferred income taxes

 

 

(39

)

 

 

37

 

 

 

(26

)

 

 

(44

)

 

 

(50

)

Net income

 

 

873

 

 

 

412

 

 

 

620

 

 

 

2,049

 

 

 

1,409

 

Less:

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

17

 

 

 

24

 

 

 

13

 

 

 

52

 

 

 

35

 

Interest expense

 

 

(44

)

 

 

(44

)

 

 

(61

)

 

 

(134

)

 

 

(130

)

Provision for income taxes

 

 

(275

)

 

 

(84

)

 

 

(193

)

 

 

(592

)

 

 

(423

)

Income from operations

 

 

1,175

 

 

 

516

 

 

 

861

 

 

 

2,723

 

 

 

1,927

 

Add:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

264

 

 

 

264

 

 

 

203

 

 

 

785

 

 

 

600

 

Other income, net

 

 

17

 

 

 

24

 

 

 

13

 

 

 

52

 

 

 

35

 

EBITDA

 

$

1,456

 

 

$

804

 

 

$

1,077

 

 

$

3,560

 

 

$

2,562

 

Net external sales

 

$

4,483

 

 

$

3,956

 

 

$

3,055

 

 

$

12,495

 

 

$

8,271

 

EBITDA Margin

 

 

32%

 

 

20%

 

 

35%

 

 

28%

 

 

31%

RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES

(Unaudited)

 

 

 

Three Months
Ended June 30,

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions of dollars)

Net cash provided by operating activities

 

$

913

 

 

$

947

 

 

$

755

 

 

$

2,560

 

 

$

1,637

 

Less:

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(230

)

 

 

(318

)

 

$

(144

)

 

 

(811

)

 

 

(414

)

Free Cash Flow

 

$

683

 

 

$

629

 

 

$

611

 

 

$

1,749

 

 

$

1,223

 

WESTLAKE CORPORATION

RECONCILIATION OF SEGMENT EBITDA TO INCOME FROM OPERATIONS

(Unaudited)

 

 

 

Three Months
Ended June 30,

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions of dollars, except percentages)

Performance and Essential Materials Segment

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

965

 

 

$

353

 

 

$

769

 

 

$

2,197

 

 

$

1,728

 

Add:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

192

 

 

 

196

 

 

 

168

 

 

 

572

 

 

 

497

 

Other income, net

 

 

5

 

 

 

12

 

 

 

9

 

 

 

25

 

 

 

25

 

EBITDA

 

$

1,162

 

 

$

561

 

 

$

946

 

 

$

2,794

 

 

$

2,250

 

Net external sales

 

$

3,104

 

 

$

2,711

 

 

$

2,322

 

 

$

8,647

 

 

$

6,210

 

EBITDA Margin

 

 

37%

 

 

21%

 

 

41%

 

 

32%

 

 

36%

 

 

Three Months
Ended June 30,

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions of dollars, except percentages)

Housing and Infrastructure Products Segment

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

236

 

 

$

186

 

 

$

103

 

 

$

607

 

 

$

270

 

Add:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

70

 

 

 

65

 

 

 

34

 

 

 

206

 

 

 

98

 

Other income, net

 

 

4

 

 

 

3

 

 

 

 

 

 

9

 

 

 

4

 

EBITDA

 

$

310

 

 

$

254

 

 

$

137

 

 

$

822

 

 

$

372

 

Net external sales

 

$

1,379

 

 

$

1,245

 

 

$

733

 

 

$

3,848

 

 

$

2,061

 

EBITDA Margin

 

 

22%

 

 

20%

 

 

19%

 

 

21%

 

 

18%

WESTLAKE CORPORATION

SUPPLEMENTAL INFORMATION

Product Sales Price and Volume Variance by Operating Segments

 

 

 

Third Quarter 2022 vs. Third
Quarter 2021

 

Third Quarter 2022 vs. Second
Quarter 2022

 

 

Average
Sales Price

 

Volume

 

Average
Sales Price

 

Volume

Performance and Essential Materials

 

+7.3

%

 

+9.5

%

 

-6.7

%

 

-6.0

%

Housing and Infrastructure Products

 

+31.1

%

 

+38.6

%

 

+1.9

%

 

-11.6

%

Company

 

+13.0

%

 

+16.5

%

 

-4.1

%

 

-7.7

%

We are no longer providing average quarterly industry prices and housing starts data.

Contact—(713) 960-9111

Investors—Steve Bender

Media—L. Benjamin Ederington

Source: Westlake Corporation

FAQ

What were Westlake Corporation's third quarter 2022 earnings?

Westlake Corporation reported a net income of $401 million, or $3.10 per share, for the third quarter of 2022.

How did the Performance and Essential Materials segment perform in Q3 2022?

The Performance and Essential Materials segment's income from operations decreased by $416 million compared to the same quarter in 2021, primarily due to lower sales prices and production.

What impact did the legal charge have on Westlake's Q3 2022 earnings?

A $70 million legal charge was recorded, impacting the earnings significantly by reducing net income.

How did Westlake's cash flow perform in the first nine months of 2022?

Cash flow from operations was $2,560 million for the nine months ending September 30, 2022, which is an increase of $923 million from the prior year.

What were the main challenges faced by Westlake Corporation in Q3 2022?

Challenges included eroding macroeconomic conditions, decreased industrial activity, and rising energy prices, particularly in Europe.

Westlake Corporation

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