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Sep 30, 2022
Westlake Q3 2022 Earnings Report
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.
Key Takeaways
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.
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.
Positive Outlook
- 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.
Challenges Ahead
- Impacted by high energy prices.
- Impacted by softer global demand.
- Slowing residential construction as the market responds to rapidly rising interest rates.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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