Westlake Chemical Earnings: Here’s Why Investors are Excited Now

Westlake Chemical Corp. (NYSE:WLK) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2%.

Westlake Chemical Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 36.48% to $2.17 in the quarter versus EPS of $1.59 in the year-earlier quarter.

Revenue: Rose 2.74% to $939 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Westlake Chemical Corp. reported adjusted EPS income of $2.17 per share. By that measure, the company beat the mean analyst estimate of $1.94. It missed the average revenue estimate of $947.99 million.

Quoting Management: Albert Chao, President and Chief Executive Officer, stated, “We are pleased to report record quarterly earnings largely driven by lower cost natural-gas based ethylene production resulting from North American shale gas and oil production. In addition, our Vinyls segment continues to improve as the U.S. economy slowly recovers. We continue to make progress on our integration strategy with the completion of the expansion of one of our ethylene crackers at our Lake Charles, Louisiana site and the acquisition of a specialty PVC pipe business in the first half of 2013. Our planned completion of a new chlor-alkali plant in Geismar, Louisiana in the fourth quarter of this year, and the conversion to ethane feedstock and expansion of our ethylene and PVC capacity in Calvert City, Kentucky in 2014 are expected to further improve the profitability of our Vinyls segment.”

Key Stats (on next page)…

Revenue increased 8.6% from $864.65 million in the previous quarter. EPS increased 17.93% from $1.84 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.73 to a profit $1.85. For the current year, the average estimate has moved up from a profit of $6.39 to a profit of $7.38 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)