Westlake Corp (WLK) · Nov 4, 2026 · Earnings
Miss — adj. EPS $0.45 vs ~$0.49 consensus
Westlake earnings show a year-over-year recovery, but adjusted EPS narrowly misses consensus as chemical pricing and housing demand weaken.
Westlake entered the quarter as a diversified chemicals and building-products company trying to repair profitability through a previously announced three-pillar plan targeting roughly $600 million of 2026 EBITDA improvement. That turnaround remains the central business story, but the quarter shows how dependent the recovery still is on volatile chemical pricing and cost actions.
The underlying recovery is real, but the quarter missed the narrow earnings bar. Adjusted diluted EPS was $0.45 versus a published consensus of roughly $0.49, while revenue of $2.981 billion exceeded the roughly $2.94 billion expectation. The company’s adjusted EBITDA of $408 million was up 30% year over year, but fell 40% from $679 million in the second quarter.
| Metric | Q3 2026 | Q2 2026 | Q3 2025 | Consensus |
|---|---|---|---|---|
| Adjusted diluted EPS (Financial Highlights) | $0.45 | $2.01 | $(0.29) | $0.49 |
| Net sales (Financial Highlights) | $2,981M | $3,271M | $2,838M | $2,940M |
| Adjusted EBITDA (Financial Highlights) | $408M | $679M | $313M | |
| Free cash flow (Free Cash Flow reconciliation) | $220M | $111M | $(57)M | |
| PEM EBITDA (Segment results — PEM) | $215M | $416M | $90M |
PEM is recovering versus last year, not yet proving a stable recovery. Performance and Essential Materials EBITDA more than doubled year over year to $215 million, helped by higher selling prices and the profitability program, but the segment’s EBITDA margin fell to 11% from 21% sequentially as the second-quarter price increases faded. European operations remain a structural problem: the company cited higher energy costs, weak demand, and rising Asian imports, and recorded $56 million of shutdown-related charges. 〔0〕
Housing demand added a second pressure point. HIP EBITDA declined to $195 million from $215 million a year earlier, with margins falling to 18% from 20%. The company attributed the weakness to lower residential construction activity, customer destocking, and higher distribution costs, although year-to-date pipe-and-fittings volume still grew 8% on infrastructure demand. 〔1〕
Cash generation and self-help execution keep the setback contained. Free cash flow reached $220 million after $188 million of capital spending, and management said the profitability plan delivered roughly $200 million of year-over-year EBITDA benefit in the quarter while remaining on track for its $600 million full-year target. That provides financial support for the turnaround, but the sequential earnings drop shows that cost savings are currently offsetting—not eliminating—the exposure to prices, demand, and European energy costs.
Bottom line: Westlake is materially healthier than a year ago, but Q3 was a narrow earnings miss and a sharp sequential step backward. The recovery remains intact, yet it still depends on chemical pricing stabilizing and the restructuring benefits becoming larger than the operating headwinds.
Q4 PEM pricing and European energy costs
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