Westlake Corp (WLK, Financial) released its Q3 2023 earnings report on November 2, 2023. The company reported a net income of $285 million, a decrease from $401 million in the same period last year. Despite the overall decline in net income, the company achieved record Housing and Infrastructure Products segment income from operations of $256 million and EBITDA of $327 million.
Financial Highlights
The company's net sales for Q3 2023 were $3.1 billion, a decrease from $3.9 billion in Q3 2022. Income from operations was $349 million, down from $516 million in the same period last year. The operating income margin was 11%, a decrease from 13% in Q3 2022. Diluted earnings per common share were $2.20, down from $3.10 in Q3 2022.
Segment Performance
The Housing and Infrastructure Products (HIP) segment reported net sales of $1.1 billion, with income from operations of $256 million. The Performance and Essential Materials (PEM) segment reported net sales of $1.9 billion, with income from operations of $105 million.
Executive Commentary
The diversity of our business was evident in the third quarter 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. Economic conditions were challenging in the third quarter with higher interest rates weighing on demand and lowering global industrial activity. Against this backdrop, 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 $30 million in the third quarter and now expect to generate an aggregate $95-$110 million 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 Albert Chao, President and Chief Executive Officer.
Outlook
Despite challenging macroeconomic conditions, including elevated inflation and high interest rates, Westlake Corp (WLK, Financial) believes its products are well-positioned in each of its segments. The company continues to seek opportunities to redeploy its robust free cash flow and solid balance sheet in ways that enhance shareholder value.
Explore the complete 8-K earnings release (here) from Westlake Corp for further details.
