NYSE$WLK

Westlake Chemical Corp · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Westlake's performance was impacted by eroding macro-economic conditions, decreased industrial activity, higher global energy prices, and slowing U.S. residential construction, while benefitting from strengthening market conditions for caustic soda.

Westlake Corporation reported a net income of $401 million, or $3.10 per share, on net sales of $3,956 million for the third quarter of 2022. The company was impacted by several factors including eroding macro-economic conditions, decreased industrial activity, and higher global energy prices.

  • Net sales reached $3.956 billion, net income was $401 million, and EBITDA was $804 million.
  • Earnings per share were $3.10, compared to $4.69 in the year-ago period.
  • 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 volumes decreased 8% sequentially from the previous quarter.

Headline financials

Total Revenue

$3.96B

Previous: $3.06B+29.5%
EPS (adj)

$3.10

Previous: $4.69-33.9%
Capital Expenditures

-$811M

Previous: -$144M-463.2%
Free Cash Flow

-$410M

Previous: $463M-188.6%
Net Income

$401M

Previous: $607M-33.9%
Operating Income

$516M

Previous: $861M-40.1%
Gross Profit

$776M

Previous: $1.02B-23.8%
Cash & Equivalents

$1.78B

Previous: $3.57B-50.2%
Total Assets

$20.4B

Previous: $17.1B+19.4%
Stock-Based Comp

$9M

Previous: $7M+28.6%

Revenue & EPS history

Westlake · Revenue · Quarterly

$3.96B

Q3 2022+29.5%vs Q3 2021
Beat estimate in 4 of 15 quarters(27%)
ActualEstimate

Forward guidance

Westlake expects to be impacted by high energy prices and softer global demand but has the ability to scale operations to meet market conditions. In Housing and Infrastructure Products, they expect to see seasonally softer demand from new home construction in the fourth quarter, but their business should be buoyed by continuing repair and remodeling activity and infrastructure spending.

Tailwinds

  • Benefit from North American producers' structural cost advantage in feedstocks, fuel and power.
  • Benefit from a strengthening market for caustic soda.
  • Ability to scale operations to meet market conditions.
  • Buoyed by continuing repair and remodeling activity.
  • Buoyed by infrastructure spending in areas such as municipal water systems, agricultural irrigation and global transportation.

Headwinds

  • Impacted by high energy prices.
  • Impacted by softer global demand.
  • Slowing residential construction as the market responds to rapidly rising interest rates.
  • Seasonally softer demand from new home construction in the fourth quarter.
  • Near-term volatility in the global economy

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.4%

Avg return

Earnings day

+1.0%

Avg return

5 days after

+1.1%

Avg return

30 days after

51%

33 / 65 earnings

Positive

+12.1%

Q4 2025

Best reaction

-13.4%

Q1 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-4.6%-6.9%-19.4%
Q4 2025+12.1%+13.3%+22.0%
Q3 2025-7.0%-9.1%-9.1%
Q1 2025-13.4%-15.5%-23.0%
Q4 2024-0.2%+2.4%-7.4%
Q3 2024+4.3%+0.5%-6.0%
Q2 2024+7.5%+9.4%+2.2%
Q1 2024+1.5%+4.0%+9.0%
Q4 2023-6.0%+2.8%+3.2%
Q3 2023+6.4%+3.6%+14.1%
Q2 2023-2.5%-1.3%-1.3%
Q1 2023+8.1%+5.3%+0.7%
Q4 2022-3.2%-0.9%-12.6%
Q3 2022+4.1%+5.5%+13.1%
Q2 2022-2.8%-2.9%-0.9%
Q1 2022+10.3%+8.0%+4.8%
Q4 2021-0.9%+2.4%+17.4%
Q3 2021+1.9%+0.9%-6.2%
Q2 2021-1.7%+0.3%+6.9%
Q1 2021+7.6%+9.3%+10.9%
Q4 2020+0.8%-2.1%+0.6%
Q3 2020-1.1%+1.3%+10.8%
Q2 2020+0.9%+7.4%+9.7%
Q1 2020+5.9%+7.8%+30.0%
Q4 2019-2.8%-4.1%-42.7%
Q3 2019+7.5%+9.3%-1.1%
Q2 2019+0.5%-0.6%-2.8%
Q1 2019-6.4%-10.6%-15.5%
Q4 2018-1.2%-6.6%-13.8%
Q3 2018+6.8%+1.9%-5.7%
Q2 2018-7.5%-6.7%-12.1%
Q1 2018-1.2%+0.5%+8.0%
Q4 2017+1.6%+4.1%+6.2%
Q3 2017+9.2%+8.1%+15.5%
Q2 2017-1.9%-2.5%+8.9%
Q1 2017+0.7%-0.1%+0.4%
Q4 2016+4.7%+3.2%+5.8%
Q3 2016+2.7%+2.5%+11.9%
Q2 2016-0.1%-4.0%+12.0%
Q1 2016-3.7%
Q4 2015-7.0%
Q3 2015+1.6%
Q2 2015+7.1%
Q1 2015-9.3%
Q4 2014+0.1%
Q3 2014-5.2%
Q2 2014-1.9%
Q1 2014+2.4%
Q4 2013+2.1%
Q3 2013+4.9%
Q2 2013+4.6%
Q1 2013+10.9%
Q4 2012-5.2%
Q3 2012-1.6%
Q2 2012+11.2%
Q1 2011-3.6%
Q1 2012+1.3%
Q1 2010-0.8%
Q4 2011-0.8%
Q4 2009-0.8%
Q3 2010+4.7%
Q3 2011+4.7%
Q4 2010-9.3%
Q2 2011-9.3%
Q2 2010-9.3%

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