The chart below shows how WLKP performed 10 days before and after its earnings report, based on data from the past quarters. Typically, WLKP sees a -1.79% change in stock price 10 days leading up to the earnings, and a -0.97% change 10 days following the report. On the earnings day itself, the stock moves by +0.55%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Earnings Per Share Beat: Westlake Chemical Partners LP reported an EPS of $0.43, exceeding expectations of $0.36.
Net Income Increase: The partnership achieved a full year net income of $62 million, or $1.77 per unit, an increase of $8 million compared to 2023.
Strong Net Income Performance: Consolidated net income, including OpCo, was $369 million for the full year 2024, demonstrating strong overall performance.
Stable Cash Flow Assurance: The company maintained a stable fee-based cash flow due to a fixed margin ethylene sales agreement for 95% of annual plant production, insulating it from market volatility.
Consistent Quarterly Distributions: The partnership has delivered 42 consecutive quarterly distributions since its IPO in July 2014, showcasing consistent performance.
Quarterly Distribution Growth: The fourth quarter distribution of $0.4714 per unit reflects a 71% growth since the original minimum quarterly distribution of $0.275 per unit.
Distribution Coverage Ratio: The partnership's distribution coverage for the full year of 2024 was 1.01 times, indicating strong cash flow relative to distributions.
Cash and Investments Total: Consolidated cash and cash investments totaled $193 million at the end of the fourth quarter, supporting financial stability.
Strong Balance Sheet: The partnership's leverage ratio remains below one times, indicating a strong balance sheet and conservative financial management.
Ethylene Price Improvement: North American spot ethylene prices and margins improved in 2024, benefiting the partnership through higher third-party ethylene sales prices.
Negative
Distributable Cash Flow Decline: Distributable cash flow for Q4 2024 decreased by $1 million compared to Q4 2023, primarily due to higher turnaround reserve and maintenance capital contributions.
Turnaround Impact on Coverage: The planned turnaround at the PetroOne ethylene unit is expected to impact the distribution coverage ratio during the period before recovering, similar to past turnarounds.
Fourth Quarter Net Income Growth: Despite an increase in net income for the full year 2024, the partnership's fourth quarter net income only increased slightly by $1 million compared to the previous year, indicating limited growth in that period.
Distribution Coverage Analysis: The partnership's distribution coverage for the full year of 2024 was only 1.01 times, suggesting a tight margin for sustaining distributions.
Long-Term Debt Risks: The company has a significant long-term debt of $400 million, which could pose risks if market conditions worsen.
Westlake Chemical Partners LP (NYSE:WLKP) Q4 2024 Earnings Call Transcript
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