Westlake (WLK) Q2 2026 earnings summary

Executive summary

• Net sales reached $3.3 billion in Q2 2026, up 11% year-over-year and 23% sequentially, with net income of $260 million ($2.01/share), reversing a prior year loss.

• EBITDA was $679 million, more than doubling from Q2 2025 and up from $235 million in Q1 2026.

• Results were driven by higher sales prices in PEM, increased HIP volumes, cost advantages, and execution of a three-pillar profitability improvement plan.

• Free cash flow for Q2 was $111 million after $207 million in capital expenditures; $500 million in debt was retired and $99 million returned to shareholders.

• Acquisitions of ACI/Perplastic Group and the Wilhelmshaven PVC/VCM plant expanded the global footprint and contributed to segment performance.

Financial highlights

• Q2 2026 net sales were $3.3 billion, up from $2.95 billion in Q2 2025; net income was $260 million ($2.01/share) versus a net loss of $12 million in Q2 2025.

• EBITDA reached $679 million, up from $340 million in Q2 2025 and $235 million in Q1 2026.

• Gross profit rose to $652 million from $258 million in Q1 2026 and $112 million in Q2 2025; gross margin improved to 20%.

• Cash, equivalents, and investments totaled $1.9 billion at quarter-end; total debt was $5.1 billion.

• Net cash from operations was $318 million, more than double the prior year, despite a $67 million legal settlement payment.

Outlook and guidance

• The three-pillar profitability improvement plan delivered $150 million of YoY EBITDA benefit in Q2 2026, targeting $600 million for FY 2026.

• HIP segment guidance maintained at the lower end of $4.4–$4.6 billion sales and 19–21% EBITDA margin for 2026, reflecting muted residential construction and higher costs.

• PEM earnings expected to benefit from improved global supply-demand fundamentals and North American cost advantages, but faces volatility from Middle East conflict.

• HIP housing products expected to outperform the market despite a flat macro environment, with robust Pipe & Fittings demand supported by infrastructure spending and new plant startup.

• Expectation for continued PEM reliability and production improvements in 2H 2026.