US chemicals and wood products company Koppers lowered its annual adjusted earnings outlook even as third-quarter sales rose 2.8 per cent. Higher raw material and logistics costs weighed on profit. Nine-month operating cash flow increased to 126.9 million dollars, and lower planned capital spending helped the company raise its annual free cash flow forecast.
Economics & Markets··Evening
Sales increase as earnings fall
Koppers, a US chemicals and wood products company, reduced its annual earnings outlook after third-quarter results showed pressure from higher input costs.[1], [2]
Sales rose 2.8 per cent from 485.3 million dollars to 499.1 million dollars. Net income declined from 23.8 million dollars to 14.7 million dollars. Adjusted earnings before interest, taxes, depreciation and amortisation fell from 70.9 million dollars to 58 million dollars. Adjusted earnings per share decreased from 1.21 dollars to 0.77 dollars.[1]
Chemicals volumes grow amid raw material pressure
Performance chemicals sales increased from 144.3 million dollars to 161.5 million dollars as volumes rose 10 per cent. The company cited restocking and market share gains. Higher scrap copper costs added 4.7 million dollars to expenses. Carbon materials and chemicals sales fell from 108.3 million dollars to 104.8 million dollars. Higher raw material costs had a 9 million dollar effect in that segment, with underutilisation adding another 1.7 million dollars.[1]
Cash flow outlook improves as spending falls
Nine-month operating cash flow rose from 77.4 million dollars to 126.9 million dollars; free cash flow increased from 39 million dollars to 92 million dollars. Koppers cut its annual adjusted earnings before interest, taxes, depreciation and amortisation forecast from 240–250 million dollars to 220–225 million dollars. Capital spending guidance fell from 55 million dollars to 50 million dollars, while annual free cash flow guidance increased to 115–135 million dollars.[1]
