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Koppers (KOP) Q1 Earnings Top Estimates, Swings to Profit
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Koppers Holdings Inc. (KOP - Free Report) swung to a profit of $4.4 million or 20 cents per share in first-quarter 2017 from a loss of $1.3 million or 6 cents per share a year ago.
Barring one-time items, earnings were 68 cents per share for the quarter, topping the Zacks Consensus Estimate of 35 cents.
Koppers, a global provider of wood treatment chemicals, treated wood products and carbon compounds, logged revenues of $346.6 million for the quarter, essentially flat year over year. Sales also surpassed the Zacks Consensus Estimate of $327 million.
Revenues stabilized in the reported quarter after five straight quarters of double-digit year over year declines. This also largely contributed to the growth in profitability in the reported quarter.
Koppers Holdings Inc. Price, Consensus and EPS Surprise
Revenues from the Railroad and Utility Products and Services (“RUPS”) segment fell 10.5% year over year to $135.5 million, hurt by lower sales volumes and pricing pressures for commercial crossties. Volumes were affected by reduced spending in the rail industry.
The Performance Chemicals (“PC”) unit recorded sales of $96.7 million in the quarter, up 9% year over year. The company saw strong sales volumes, driven by increased demand in North America for copper-based wood preservatives and additives.
Revenues from the Carbon Materials and Chemicals (“CMC”) division rose 6.5% to $114.4 million, supported by increased sales volumes for carbon black feedstock and other coal tar products.
Balance Sheet
Koppers ended the quarter with cash and cash equivalents of $23.4 million, up around 50% year over year. Long-term debt was $696.1 million, up around 2% year over year.
Outlook
Koppers said that it expects sales for 2017 to be relatively flat year-over-year at around $1.4 billion. The company retained its adjusted EBITDA forecast of roughly $180 million for the year. The company now sees adjusted earnings in the range of $2.80 to $3.00 per share for 2017, compared with the earlier expectations of $2.75 to $2.85 per share. The revision is mainly due to lower than expected effective tax rate.
Price Performance
Koppers has outperformed the Zacks categorized Chemicals-Diversified industry over a year. The company’s shares have rallied around 53.1% over this period compared with the industry’s gain of 17.9% over the same period.
Chemours has an expected long-term growth of 15.5%.
Kronos has an expected long-term growth of 5%.
Methanex has an expected long-term growth of 15%.
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Koppers (KOP) Q1 Earnings Top Estimates, Swings to Profit
Koppers Holdings Inc. (KOP - Free Report) swung to a profit of $4.4 million or 20 cents per share in first-quarter 2017 from a loss of $1.3 million or 6 cents per share a year ago.
Barring one-time items, earnings were 68 cents per share for the quarter, topping the Zacks Consensus Estimate of 35 cents.
Koppers, a global provider of wood treatment chemicals, treated wood products and carbon compounds, logged revenues of $346.6 million for the quarter, essentially flat year over year. Sales also surpassed the Zacks Consensus Estimate of $327 million.
Revenues stabilized in the reported quarter after five straight quarters of double-digit year over year declines. This also largely contributed to the growth in profitability in the reported quarter.
Koppers Holdings Inc. Price, Consensus and EPS Surprise
Koppers Holdings Inc. Price, Consensus and EPS Surprise | Koppers Holdings Inc. Quote
Segment Highlights
Revenues from the Railroad and Utility Products and Services (“RUPS”) segment fell 10.5% year over year to $135.5 million, hurt by lower sales volumes and pricing pressures for commercial crossties. Volumes were affected by reduced spending in the rail industry.
The Performance Chemicals (“PC”) unit recorded sales of $96.7 million in the quarter, up 9% year over year. The company saw strong sales volumes, driven by increased demand in North America for copper-based wood preservatives and additives.
Revenues from the Carbon Materials and Chemicals (“CMC”) division rose 6.5% to $114.4 million, supported by increased sales volumes for carbon black feedstock and other coal tar products.
Balance Sheet
Koppers ended the quarter with cash and cash equivalents of $23.4 million, up around 50% year over year. Long-term debt was $696.1 million, up around 2% year over year.
Outlook
Koppers said that it expects sales for 2017 to be relatively flat year-over-year at around $1.4 billion. The company retained its adjusted EBITDA forecast of roughly $180 million for the year. The company now sees adjusted earnings in the range of $2.80 to $3.00 per share for 2017, compared with the earlier expectations of $2.75 to $2.85 per share. The revision is mainly due to lower than expected effective tax rate.
Price Performance
Koppers has outperformed the Zacks categorized Chemicals-Diversified industry over a year. The company’s shares have rallied around 53.1% over this period compared with the industry’s gain of 17.9% over the same period.
Zacks Rank & Key Picks
Koppers is a Zacks Rank #3 (Hold) stock.
Better-ranked companies in the chemical space include The Chemours Company (CC - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Methanex Corporation (MEOH - Free Report) , all holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term growth of 15.5%.
Kronos has an expected long-term growth of 5%.
Methanex has an expected long-term growth of 15%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>