Westlake Corporation has delivered a sharp financial rebound in the second quarter of 2026, reporting a major jump in profitability as stronger pricing, higher sales volumes and cost-cutting powered a dramatic recovery from the previous quarter and year-ago losses.

 

The global manufacturer posted net sales of $3.3 billion, net income of $260 million, or $2.01 per diluted share, and EBITDA of $679 million for the quarter. The results mark a significant turnaround from the first quarter of 2026, when Westlake reported a net loss of $169 million, and from the second quarter of 2025, when the company posted a net loss attributable to Westlake of $142 million.

 

EBITDA more than doubled year over year, rising 100% from $340 million in the second quarter of 2025 to $679 million, while EBITDA margin climbed to 21%, compared with 12% a year earlier.

 

The company credited the improvement to stronger performance in its Performance and Essential Materials (PEM) segment, higher sales volumes in Housing and Infrastructure Products (HIP), and progress on its three-pillar profitability improvement plan, which is expected to deliver a $600 million operating income benefit.

 

Westlake also strengthened its balance sheet during the quarter, reducing debt by $500 million, returning $99 million to shareholders through dividends and share repurchases, and replacing its existing revolving credit facility with a new $1.5 billion revolver extending through 2031.

 

"The significant improvement in PEM's second quarter earnings underscores its substantial leverage to improving global supply-demand fundamentals, driven in part by logistical disruptions in the Strait of Hormuz, as well as the meaningful actions that we took last year to improve PEM earnings through footprint optimization, cost reduction, and reliability improvement. 

 

"Meanwhile, despite slower North American residential construction activity and accelerating raw material cost inflation, financial results in our HIP segment were solid in the second quarter with EBITDA growth that was driven by a double-digit increase in pipe & fittings sales volume. 

 

"During the second quarter, we completed the acquisition of a PVC and VCM production site in Wilhelmshaven, Germany, which adds advantaged logistical assets into our European chlorovinyls business," said Jean-Marc Gilson, President and Chief Executive Officer.

 

The company’s PEM segment led the recovery, benefiting from higher average selling prices and improved margins. PEM operating income surged to $185 million, compared with a $318 million loss in the second quarter of 2025. EBITDA reached $416 million, up from a loss of $78 million a year earlier.

 

"The ongoing conflict in the Middle East continues to exacerbate volatility in selling prices and export demand across many of PEM's products, including polyethylene and PVC resin. Regardless of this impact, PEM's earnings should continue to benefit from our three-pillar profitability improvement plan and our globally advantaged North American feedstock and energy cost position. 

 

"In HIP, slower homebuilding activity due to affordability pressures is being offset by strong demand for pipe and fittings, driven by North American infrastructure investments," Gilson said.

 

Westlake’s Housing and Infrastructure Products segment also posted gains, with net sales rising to $1.25 billion from $1.16 billion a year earlier. The segment benefited from a 6% increase in sales volume, excluding the impact of the ACI acquisition, with particularly strong demand for pipe and fittings.

 

HIP EBITDA reached $276 million, although margins eased to 22% from 24% in the prior-year quarter due to lower average sales prices and margin pressure.

 

"During the second quarter of 2026 we returned to free cash flow generation, reduced debt by $500 million and replaced our existing revolving credit facility, which had a scheduled expiration in 2027, with a new $1.5 billion revolver that expires in 2031. We continue to prioritize a disciplined approach to capital deployment supported by our strong financial position," added Jonathan Baksht, Senior Vice President and Chief Financial Officer.

 

Westlake generated $318 million in operating cash flow during the quarter and ended June 30, 2026, with $1.9 billion in cash, cash equivalents and fixed-income investments and total debt of $5.1 billion.

 

Looking ahead, the company said it expects continued benefits from its profitability improvement initiatives, global supply-demand trends, infrastructure demand and its competitive North American feedstock and energy position, while warning that geopolitical uncertainty, raw material costs and housing market pressures remain key risks.