On August 6, 2024, Westlake Corp (WLK, Financial) released its 8-K filing reporting robust second quarter 2024 results. Westlake Corp, a manufacturer and supplier of chemicals, polymers, and building products, operates through its Performance and Essential Materials (PEM) and Housing and Infrastructure Products (HIP) segments.
Financial Highlights
Westlake Corp reported net sales of $3.2 billion, slightly below the analyst estimate of $3.237 billion. However, the company exceeded earnings expectations with a diluted earnings per share (EPS) of $2.40, surpassing the estimated $2.04. This performance was driven by record income from operations and EBITDA in the HIP segment.
Segment Performance
The HIP segment achieved record income from operations of $266 million and EBITDA of $336 million, reflecting strong demand and higher sales volumes. The PEM segment also showed sequential improvements with income from operations increasing to $157 million from $22 million in the previous quarter, driven by higher average sales prices.
Income Statement Overview
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Sales | $3,207 million | $2,975 million | $3,251 million |
| Income from Operations | $406 million | $223 million | $396 million |
| Net Income | $313 million | $174 million | $297 million |
| Diluted EPS | $2.40 | $1.34 | $2.31 |
| EBITDA | $744 million | $546 million | $690 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Westlake Corp reported cash and cash equivalents of $3.0 billion and total debt of $4.9 billion. Net cash provided by operating activities was $237 million for the second quarter, with capital expenditures amounting to $231 million.
Executive Commentary
"We are pleased with our financial results for the second quarter of 2024, highlighted by record HIP EBITDA and margins as well as improved pricing and profitability in the PEM segment. Combined, these factors enabled us to deliver year-over-year quarterly earnings growth following the slowdown in global macroeconomic activity that began in the second half of 2022," said Albert Chao, Executive Chairman.
Analysis and Outlook
Westlake Corp's strong performance in the HIP segment, driven by favorable market conditions and strategic positioning, underscores the company's resilience and growth potential. The sequential improvement in the PEM segment also indicates a positive trend in demand and pricing. However, challenges such as lower average sales prices for certain products in the PEM segment highlight the need for continued strategic adjustments.
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Explore the complete 8-K earnings release (here) from Westlake Corp for further details.
