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Koppers (KOP) Q3 Earnings, Revenues Top Estimates

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Koppers Holdings Inc. (KOP - Free Report) logged a profit of $19.8 million or 91 cents per share in third-quarter 2017, up around 64% from $12.1 million or 58 cents per share a year ago.

Barring one-time items, earnings were $1.43 per share for the quarter, outstripping the Zacks Consensus Estimate of 88 cents.

Koppers, a global provider of wood treatment chemicals, treated wood products and carbon compounds, recorded revenues of $384.8 million for the quarter, up around 4% year over year. The top line was driven by strong gains in the Carbon Materials and Chemicals (CMC) division. Sales also surpassed the Zacks Consensus Estimate of $363 million.

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 around 10% year over year to $131.7 million, hurt by lower sales volumes of treated crossties and railroad bridge services and decreased pricing for commercial crossties.

The Performance Chemicals (PC) unit recorded sales of $109.7 million in the quarter, up 2% year over year. The growth was driven by increased volumes in North America for copper-based wood preservatives and additives.  

Revenues from the CMC division rose around 22% to $143.4 million, mainly driven by higher sales prices for carbon pitch and carbon black feedstock across Australasia and Europe resulting from lower supply in those regions. Profitability of the segment increased significantly on a year over year basis on the back of favorable market conditions, savings benefits from restructuring actions and lower average raw material and logistics costs in North America.

Balance Sheet

Koppers ended the quarter with cash and cash equivalents of $50.2 million, up nearly three-fold year over year. Long-term debt was $688 million, up around 7% year over year.


Koppers said that it continues to see sales for 2017 to be relatively flat year-over-year at around $1.4 billion. The company raised its adjusted EBITDA forecast to around $195 million from roughly $185 million expected earlier. The company now sees adjusted earnings in the range of $3.70 to $3.80 per share for 2017, up from its prior view of $3.10 to $3.30 per share.

Moreover, Koppers continues to expect capital expenditures to be in the band of $70 million to $75 million for the full year.

Price Performance

Koppers has outperformed the industry it belongs to over the past six months. The company’s shares have rallied around 20.8% over this period compared with the industry’s gain of 13.5% over the same period.


Zacks Rank & Stocks to Consider

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

Better-ranked companies in the basic materials space include Westlake Chemical Corporation (WLK - Free Report) , Ingevity Corporation (NGVT - Free Report) and Kraton Corporation (KRA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake has an expected long-term earnings growth of 8.4%.

Ingevity has an expected long-term earnings growth of 12%.

Kraton has an expected earnings growth of 25.4% for the current year.

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