Westlake misses third-quarter earnings estimates as higher borrowing costs weigh on sales volumes

Revenue of $2.98bn matched expectations, but chief executive Jean-Marc Gilson says higher borrowing costs are hurting near-term sales volumes in Housing and Infrastructure Products.

Westlake missed third-quarter profit estimates, earning $0.45 a share excluding Identified Items, $0.12 worse than expected. Revenue was $2.98bn, in line with expectations.

Jean-Marc Gilson, president and chief executive, blamed higher borrowing costs. He said they are weighing on near-term sales volumes in Housing and Infrastructure Products (HIP).

His offset is pricing in Performance and Essential Materials (PEM). Gilson said PEM selling prices have stabilized and enter the fourth quarter with upward momentum.

For the fourth quarter, Westlake expects HIP revenue of $900m to $1bn and an EBITDA margin of about 13%. EBITDA is earnings before interest, tax, depreciation and amortization. The forecast is management's own and covers one segment for one quarter.

If PEM prices stall, the earnings shortfall could extend beyond the current quarter.