The earnings beat and dramatic PEM turnaround are positive, but the stock has historically faded after strong reports (past model calls on WLK have underperformed). Monitor the conference call for Q3 guidance and commentary on sustainability of PEM pricing. The debt reduction and free cash flow generation support the balance sheet. Consider taking profits if the stock gaps up significantly on open.
Price Chart
Executive Summary
Westlake Corp reported Q2 2026 results with a significant turnaround: net income of $260M ($2.01 EPS) vs a net loss of $142M a year ago, beating consensus EPS of $1.89 by 6.6%. Revenue rose 11% YoY to $3.27B, slightly above the $3.25B consensus. The Performance & Essential Materials segment swung to a $185M operating profit from a $318M loss, driven by a 14% YoY increase in average sales prices from Middle East supply disruptions and cost actions. The company reduced debt by $500M and generated $111M in free cash flow.
Key Financial Metrics
Key Facts
- Q2 2026 GAAP diluted EPS $2.01 vs consensus $1.89 (beat by 6.6%)
- Revenue $3.271B vs consensus $3.25B (beat by 0.65%)
- Net income $260M vs net loss of $142M in Q2 2025
- EBITDA excl. identified items $679M, up 100% YoY from $340M
- PEM segment operating income $185M vs loss of $188M YoY on 14% higher average sales prices
- HIP segment EBITDA flat at $276M despite 3% lower ASP, supported by 6% volume growth
- Reduced debt by $500M via redemption of 3.60% 2026 Senior Notes
- Free cash flow $111M after $207M capex
- Three-pillar profitability plan on track to deliver $600M operating income benefit in FY26
- HIP guidance maintained at lower ends of $4.4-$4.6B sales and 19%-21% EBITDA margin
Financial Impact
EPS beat by $0.12 (6.6%), revenue beat by $21M (0.65%), EBITDA doubled to $679M
Risk Factors
- PEM pricing driven by Middle East conflict is volatile and may normalize
- HIP segment faces headwinds from slower residential construction and raw material inflation
- Historical pattern shows WLK stock often declines after earnings, even on beats
- No explicit full-year guidance raised beyond maintained HIP ranges
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001262823-26-000026 |
| Exhibit: ex992_20260630wlkearning.htm | 0001262823-26-000026 |
| Document: wlk-20260804.htm | 0001262823-26-000026 |
| Document: 0001262823-26-000026-index-headers.html | 0001262823-26-000026 |
| Document: 0001262823-26-000026-index.html | 0001262823-26-000026 |
| Document: 0001262823-26-000026.txt | 0001262823-26-000026 |
| 8-K Data (Synthetic) | 0001262823-26-000026 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 31, 2026 4w ago | 8-K | $74.23 $62.31 | ▼ −16.06% | ▼ −16.38% | $63.50 (−14.46%) |
Aug 14, 2026 7w ago | Press Release | $78.21 $70.02 | ▼ −10.47% | ▼ −8.49% | $63.50 (−18.81%) |
Aug 4, 2026 8w ago | 8-K | $80.63 $74.23 | ▼ −7.94% | ▼ −6.70% | $63.50 (−21.25%) |
Jul 21, 2026 10w ago | Press Release | $76.22 $77.52 | ▼ −1.71% | ▲ +0.86% | $63.50 (+16.69%) |
Jun 15, 2026 15w ago | 8-K | $84.33 $77.04 | ▼ −8.64% | ▼ −8.84% | $63.50 (−24.70%) |
Jun 14, 2026 15w ago | Institutional Cluster | $87.45 $76.07 | ▼ −13.01% | ▼ −12.26% | $63.50 (−27.39%) |
May 5, 2026 21w ago | 8-K | $104.29 $86.83 | ▲ +16.74% | ▲ +21.70% | $63.50 (+39.11%) |
Apr 20, 2026 23w ago | 8-K | $115.44 $91.46 | ▼ −20.77% | ▼ −25.69% | $63.50 (−44.99%) |
Apr 14, 2026 24w ago | 8-K | $117.84 $97.56 | ▲ +17.21% | ▲ +23.51% | $63.50 (+46.11%) |
Apr 6, 2026 25w ago | 8-K | $119.51 $114.07 | ▼ −4.55% | ▼ −13.53% | $63.50 (−46.87%) |
US Market Status
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