Westlake Corporation (NYSE:WLK) reported first-quarter results that came in well below expectations, sending its stock sharply lower in premarket trading.
Shares dropped 16% following the announcement.
The chemical producer posted an adjusted loss of -$0.77 per share, significantly wider than the analyst consensus of -$0.17. Revenue totaled $2.65 billion, missing estimates of $2.78 billion and declining 7% year over year from $2.85 billion in the same period of 2025.
Results were weighed down by a $67 million litigation settlement tied to PVC pipe and fittings, along with $18 million in charges related to previously announced facility shutdowns.
“The first quarter of 2026 began to reflect our cost reduction initiatives announced in 2025. Late in the first quarter we began to see margin improvement in the PEM segment as a result of the Iranian conflict,” said Jean-Marc Gilson, President and Chief Executive Officer.
The Housing and Infrastructure Products segment generated $993 million in revenue, roughly flat compared to $996 million a year earlier. Segment operating income, excluding certain items, declined by $24 million year over year to $124 million, pressured by lower pricing and margins, particularly in Pipe & Fittings, as well as reduced volumes in Building Products.
The Performance and Essential Materials segment reported revenue of $1.66 billion, down 10% from $1.85 billion in the prior-year quarter. The segment recorded an operating loss of $194 million, compared to a loss of $156 million a year earlier, reflecting weaker pricing despite some margin improvement from optimization efforts.
Adjusted EBITDA, excluding identified items, came in at $235 million, down 20% from $295 million in the first quarter of 2025. The company also reported net cash used in operating activities of $94 million, alongside capital expenditures of $209 million.