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Koppers (KOP) Earnings & Revenues Trail Estimates in Q2

Anindya Barman
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Koppers (KOP) Earnings & Revenues Trail Estimates in Q2

Koppers (KOP) reaffirmed its adjusted earnings guidance at the range of $4.05 and $4.25 per share for 2018.

Koppers Holdings Inc. KOP logged a profit of $0.6 million or 3 cents per share for second-quarter 2018, down roughly 97% from $19.7 million or 90 cents a year ago.

Barring one-time items, earnings were 93 cents per share for the quarter, missing the Zacks Consensus Estimate of $1.10.

Koppers, a global provider of wood treatment chemicals, treated wood products and carbon compounds, recorded revenues of $436 million for the quarter, up around 15% year over year. Acquisitions and favorable currency translation contributed to the top line growth. The company saw higher revenues across all segments. Sales, however, fell short of the Zacks Consensus Estimate of $490.6 million.

Koppers Holdings Inc. Price, Consensus and EPS Surprise

 

Koppers Holdings Inc. Price, Consensus and EPS Surprise

Koppers Holdings Inc. price-consensus-eps-surprise-chart | Koppers Holdings Inc. Quote

Segment Highlights

Revenues from the Railroad and Utility Products and Services (RUPS) segment surged around 30% year over year to $177.2 million. The growth was driven by acquisitions and higher volumes in the commercial crosstie and rail joint markets that more than offset lower crosstie demand from Class I customers.

The Performance Chemicals (PC) unit recorded sales of $115.1 million in the quarter, up 3% year over year. The growth was driven by increased volumes in North America for copper-based wood preservatives.   

Revenues from the Carbon Materials and Chemicals (CMC) division rose around 10% to $143.7 million, mainly driven by higher sales prices for carbon pitch and carbon black feedstock that more than offset lower volumes in carbon pitch across all regions and phthalic anhydride in North America.

Financials

Koppers ended the quarter with cash and cash equivalents of $62.5 million, up around 56% year over year. Long-term debt was $984.8 million, up around 45% year over year.

Capital expenditures for the first half of 2018 were $53.6 million, up roughly 57% from $34.2 million for the same period a year ago.

Outlook

Koppers now sees sales for 2018 to be around $1.8 billion factoring in acquisitions, modest market share gains and a favorable economic environment. The company continues to expect adjusted EBITDA to be around $240 million for 2018. Koppers also reaffirmed its adjusted earnings guidance in the range of $4.05 and $4.25 per share for 2018.

Moreover, Koppers now expects capital expenditures to be in the band of $70 million to $78 million for the full year.

Price Performance

Koppers has underperformed the industry it belongs to over the past six months. The company’s shares have lost around 12.6% over this period compared with the industry’s decline of 2.2%.



 

Zacks Rank & Other Stocks to Consider

Koppers is a Zacks Rank #3 (Hold) stock.

Some better-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. KMG, Ingevity Corporation NGVT and Celanese Corporation CE each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 43% over a year.

Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 79% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have shot up roughly 22% over a year.

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