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Koppers (KOP) Q1 Earnings, Revenues Top Estimates

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Koppers Holdings Inc. (KOP - Free Report) logged a profit of $17.8 million or 81 cents per share for first-quarter 2018, a roughly four-fold surge from $4.4 million or 20 cents a year ago.

Barring one-time items, earnings were $1.18 per share for the quarter, outstripping the Zacks Consensus Estimate of 87 cents.

Koppers, a global provider of wood treatment chemicals, treated wood products and carbon compounds, recorded revenues of $406.1 million for the quarter, up around 17% 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 $400 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 20% year over year to $108.4 million, hurt by lower sales volumes of crossties due to a decline in spending in the rail industry and project delays as a result of unfavorable weather conditions throughout the United States.

The Performance Chemicals (PC) unit recorded sales of $97.4 million in the quarter, up 1% year over year. The growth was driven by positive market trends and increased volumes related to Australasia for copper-based wood preservatives.  

Revenues from the CMC division surged around 75% to $200.3 million, mainly driven by increased sales prices for carbon pitch, carbon black feedstock and naphthalene as well as higher sales volumes for carbon pitch and coal tar chemicals. Profitability of the segment increased significantly on a year over year basis on the back of favorable market conditions and pricing and cost savings from restructuring actions.

Balance Sheet

Koppers ended the quarter with cash and cash equivalents of $52.2 million, up around two-fold year over year. Long-term debt was $782.9 million, up around 12% year over year.


Koppers said that it continues to see sales for 2018 to be $1.9 billion factoring in acquisitions, modest market share gains and a favorable economic environment. The company expects adjusted EBITDA to be around $240 million for the year. The company sees adjusted earnings in the range of $4.05 and $4.25 per share for 2018.

Moreover, Koppers expects capital expenditures to be in the band of $65 million to $75 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 21.4% over this period compared with the industry’s decline of 4.6%.


Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Celanese Corporation (CE - Free Report) and Methanex Corporation (MEOH - Free Report) .

Kronos has an expected long-term earnings growth rate of 5% and flaunts a Zacks Rank #1 (Strong Buy). The company’s shares have moved up around 31% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celanese has an expected long-term earnings growth rate of 8.9% and sports a Zacks Rank #1. Its shares have gained roughly 25% over a year.

Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have roughly 48% over a year.
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