Westlake reports Q3 EPS $2.20, consensus $1.97

Reports Q3 revenue $3.12B, consensus $3.26B. “The diversity of our business was evident in Q3 of 2023 as record quarterly income from operations and EBITDA in our HIP segment supported our overall profitability, while our PEM segment results reflected the soft economic conditions in global markets….we were pleased to sequentially grow both our PEM and HIP segment sales volumes and to generate record HIP segment quarterly EBITDA. We also made solid progress with our cost reduction program achieving savings of $30M in Q3 and now expect to generate an aggregate $95M-$110M of cost savings in 2023. Additionally, in August, we took the important step of increasing our quarterly dividend by 40%, reflecting our confidence in the Company’s future and the strength of our business,” said CEO Albert Chao. “As we enter Q4, weak macroeconomic conditions, including elevated inflation and high interest rates, remain in place driving softer demand for all of our products and low sales prices in our PEM segment. Despite this near-term outlook, we believe our products are well-positioned in each of our segments. PEM volumes and profitability are supported by our North American structural feedstock and energy cost advantage, a high degree of vertical integration and our product diversity….In addition to the typical seasonal decline in sales in the fourth quarter, we expect some impact to sales volume from the elevated level in borrowing rates. Finally, we continue to seek opportunities to redeploy our robust free cash flow and solid balance sheet in ways that enhance shareholder value.”