Westlake Corp (NYSE:WLK) Q3 2025 Earnings Miss Estimates, Stock Plunges

Westlake Corporation (NYSE:WLK) reported financial results for the third quarter of 2025 that fell short of analyst expectations, leading to a sharp negative reaction in the pre-market trading session. The company's performance was heavily impacted by significant one-time charges and continued pressure on pricing within its key industrial materials segment.

Earnings and Revenue Versus Estimates

The company's Q3 results notably missed Wall Street forecasts on both the top and bottom lines. The reported figures paint a picture of a quarter challenged by macroeconomic headwinds.

• Revenue: The company reported net sales of $2.84 billion, falling short of the analyst consensus estimate of approximately $2.97 billion.
• Earnings Per Share (EPS): On a non-GAAP basis, which excludes identified items, the diluted loss per share was $0.29. This was significantly worse than the analyst estimate for a profit of $0.25 per share.

The market's immediate reaction was decisively negative, with the stock down approximately 8.8% in pre-market trading following the earnings announcement. This sell-off reflects investor disappointment with the earnings miss and concerns about the company's near-term profitability.

Key Factors in the Quarterly Performance

The quarter was dominated by a substantial non-cash impairment charge and a clear divergence in performance between the company's two main business segments.

• Major Goodwill Impairment: Westlake recorded a non-cash impairment charge of $727 million to write off all the goodwill associated with its North American Chlorovinyls business. This accounting adjustment reflects a weaker outlook for the profitability of this unit but does not impact the company's cash position.
• Segment Performance Split:
  • The Performance and Essential Materials (PEM) segment was the primary source of weakness, reporting a loss from operations. The segment faced lower average sales prices, particularly for PVC resin, attributed to weak global industrial and manufacturing demand.
  • In contrast, the Housing and Infrastructure Products (HIP) segment demonstrated resilience. It maintained stable sales year-over-year despite a slowing residential construction market, with income from operations of $151 million.

Looking Ahead

While the quarter was difficult, management provided commentary on actions being taken to improve future performance. The company has identified $200 million in cost savings expected to be realized in 2026. Furthermore, footprint optimization, including the previously announced shutdown of the Pernis facility, is projected to remove approximately $100 million in annual losses starting next year. These initiatives are intended to support a recovery in margins and earnings in the coming year.

For a more detailed look at Westlake's historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and is not intended as investment advice. All investment decisions involve risk, and readers should conduct their own research before making any financial decisions.