Westlake Chemical shares plunge on steep earnings miss

Investing.com -- Westlake Chemical Corporation (NYSE:WLK) saw its shares tumble 12.3% after reporting a significant earnings miss for the first quarter of 2025, as higher costs and weaker demand weighed heavily on results.

The chemical and building products manufacturer posted a loss of $0.31 per share, falling far short of analysts’ expectations for a profit of $0.78 per share. Revenue came in at $2.85 billion, below the consensus estimate of $2.96 billion and down 4.4% from $2.98 billion in the same quarter last year.

Westlake reported a net loss of $40 million for the quarter, compared to net income of $174 million in Q1 2024. The company cited higher feedstock and energy costs in North America, planned turnarounds, and unplanned plant outages that impacted EBITDA by approximately $80 million as key factors behind the disappointing results.

"Our first quarter of 2025 earnings were impacted by higher North American feedstock and energy costs, partially due to winter storms early in the quarter, our planned turnaround at our Petro 1 ethylene unit, and unfavorable sales mix changes in our HIP segment," said Jean-Marc Gilson, President and CEO.

The Performance and Essential Materials segment was particularly hard hit, swinging to an operating loss of $163 million compared to operating income of $22 million a year ago. Weak global demand for PVC resin and polyethylene contributed to a 2% decline in sales volume for the segment.

While the Housing and Infrastructure Products segment fared better with 4% sales volume growth, its operating income still fell to $148 million from $210 million last year due to lower average selling prices and margins.

Westlake ended the quarter with $2.5 billion in cash and marketable securities. The company did not provide specific guidance for the upcoming quarter or full year.

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