In This Article:
Westlake Chemical Corporation WLK recorded a profit of $278 million or $2.12 per share for second-quarter 2018, up from $153 million or $1.17 earned a year ago.
The bottom line was boosted by higher selling prices for key products, increased sales volumes of caustic soda, PVC (polyvinyl chloride) resin and polyethylene as well as benefits from lower U.S. corporate tax rate and repayment of debt.
Barring one-time items, earnings in the reported quarter were $2.45 per share, which missed the Zacks Consensus Estimate of $2.52.
Westlake Chemical posted second-quarter revenues of $2,235 million, up roughly 12.9% year over year. It beat the Zacks Consensus Estimate of $2,157 million.
Sales in the quarter benefited from higher prices for major products and increased sales volumes for caustic soda, PVC resin and polyethylene, partly offset by lower styrene sales volume.
Westlake Chemical Corporation Price, Consensus and EPS Surprise
Westlake Chemical Corporation Price, Consensus and EPS Surprise | Westlake Chemical Corporation Quote
Segment Highlights
Sales from the Olefins segment fell 1.4% year over year to $482 million in the quarter. Operating income at the segment increased 10.4% year over year to $158 million driven by higher sales prices for major products and increased polyethylene sales volume.
The Vinyls segment recorded sales of $1,753 million, up 17.6% year over year. Operating income at the segment was $271 million, up roughly 92% year over year. The upside was driven by higher prices for major products, lower ethylene costs, better operating rates due to lower planned turnarounds and unplanned outages compared to the second quarter of 2017, and increased sales volumes.
Financial Position
Westlake Chemical ended the quarter with cash and cash equivalents of roughly $482 million, up 22% year over year. Total debt was $2,666 million at the end of the quarter, down 23.5% year over year.
Cash flow from operations was around $324 million in the quarter, slightly up around 0.3% year over year.
Outlook
The company noted that demand for products across its segments remains strong. It is also benefiting from investments made last year to improve operations and reliability.
Westlake Chemical is working diligently on capturing targeted synergies and cost reductions associated with the Axiall acquisition while remaining focused on the recently-announced expansion in the Vinyls segment along with other opportunities that will improve its operations.
Price Performance
Shares of Westlake Chemical have rallied 41.3% in a year’s time, outperforming the 30.0% rise recorded by its industry.