Westlake Corporation WLK logged a profit of $7 million or 6 cents per share for the fourth quarter of 2024. This compares to a loss of $497 million or $3.86 in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $1.04.

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Sales rose around 0.6% year over year to $2,843 million in the quarter. It missed the Zacks Consensus Estimate of $2,904.6 million. A 3% growth in sales volume was offset by a 2% decline in average sales prices.

Sales in the Performance and Essential Materials (PEM) segment went down around 0.9% year over year to $1,862 million in the reported quarter. It lagged our estimate of $1,916.7 million. Performance and Essential Materials' loss from operations in the fourth quarter of 2024 was $41 million compared with a loss of $39 million in the fourth quarter of 2023, owing to reduced selling prices for the majority of WLK’s primary products, including chlorine, PVC resin and polyethylene. This negative impact was partly mitigated by increased sales volume, particularly of polyethylene and PVC resin.

The Housing and Infrastructure Products (HIP) segment generated sales of $981 million, up around 3.7% from the year-ago quarter. The figure missed our estimate of $983.1 million. HIP’s income from operations in the fourth quarter of 2024 was $129 million, up $8 million from the fourth quarter of 2023. The year-over-year rise was driven by increasing sales volume, particularly for pipe and fittings.

WLK's Financial Position

Operating activities generated $434 million in net cash in the fourth quarter of 2024 and $1.3 billion in total for the year 2024. Capital expenditures for the fourth quarter and 2024 were $285 million and $1 billion, respectively. For the fourth quarter and the full year, free cash flow was $149 million and $306 million, respectively. As of Dec. 31, 2024, the company's cash and cash equivalents were $2.9 billion, with a total debt of $4.6 billion.

WLK's Outlook

WLK is optimistic about the outlook for its HIP segment, which is supported by the need to boost the supply of residential housing in the United States after more than 15 years of under-building to support population growth and subsequent housing demand. While global macroeconomic conditions remain tough to begin the year, the PEM segment is well-positioned to benefit from a future resurgence in global industrial and manufacturing activity. The company's focus for 2025 will be on improving the components of earnings growth that it can control, such as carrying out cost-cutting plans, increasing the value it provides to its customers, ensuring the safety and reliability of its plants, and commercializing new product innovations.

WLK’s Zacks Rank & Key Picks

WLK currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth a look in the basic materials space include Orla Mining Ltd. ORLA, Fortuna Mining Corp. FSM and Kronos Worldwide KRO.

Orla is slated to report fourth-quarter results on March 18. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 8 cents. ORLA beat the Zacks Consensus Estimate in two of the last four quarters while missing once and meeting on the other occasion, with the average earnings surprise being 97.9%. ORLA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fortuna is scheduled to release fourth-quarter results on March 5. The Zacks Consensus Estimate for FSM’s fourth-quarter earnings is pegged at 16 cents. FSM, a Zacks Rank #2 stock, has gained around 64.6% in the past year. FSM beat the Zacks Consensus Estimate in two of the last four quarters, while missing twice with the average earnings surprise being 53.5%

Kronos is expected to report fourth-quarter results on March 5. The consensus estimate for KRO’s fourth-quarter earnings is pegged at 11 cents. KRO, carrying a Zacks Rank #2, beat the consensus estimate in three of the last four quarters while missing once, with the average earnings surprise being 41.7%. 

 

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