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Investing.com -- Shares of Koppers Holdings Inc . (NYSE: NYSE:KOP) tumbled 12% following the release of the company’s fourth-quarter earnings, which fell short of Wall Street expectations. The integrated global provider of treated wood products, wood treatment chemicals, and carbon compounds reported a quarterly EPS of $0.77, missing the analyst consensus estimate of $0.91. Revenue also declined, coming in at $477 million against the expected $509.23 million.
The company’s financial performance for the fourth quarter of 2024 showed a net loss of $10.2 million, or $0.50 per diluted share, a stark contrast to the net income of $12.9 million, or $0.59 per diluted share, in the same period the previous year. While adjusted net income and EBITDA saw slight improvements from the prior year, consolidated sales experienced a 7.1% drop compared to the fourth quarter of 2023.
Koppers’ Railroad and Utility Products and Services (RUPS) division reported decreased sales and profitability, primarily due to lower volumes for Class I crossties and increased costs. The Performance Chemicals (PC) segment also saw a decline in sales and profitability, driven by lower volumes and higher raw material costs, despite achieving improved margins from cost-saving initiatives. The Carbon Materials and Chemicals (CMC) segment reported a sales decrease, mainly due to reduced prices across most products, although profitability increased due to lower costs and a bad debt reserve in the prior year period.
Looking ahead, Koppers provided guidance for FY2025, forecasting an EPS of $4.75, which is above the consensus estimate of $4.58. However, the company anticipates FY2025 revenue to be around $2.17 billion, falling short of the expected $2.23 billion.
Koppers CEO Leroy Ball (NYSE:BALL) commented on the results, stating, "While 2024 results fell short of our expectations for performance, I am proud of the many accomplishments of Koppers team members worldwide that enabled us to make continued progress on our journey of creating the foundation for a connected world through our diverse portfolio of leading products and services." He acknowledged the setbacks in sales activity towards the end of the year but expressed confidence in the cost actions taken to navigate the uncertain economic climate.
The company’s outlook for 2025 takes into account the current competitive environment, global economic conditions, and the ongoing uncertainty associated with geopolitical and supply chain challenges. Koppers expects to focus on reducing debt and repurchasing shares, considering them undervalued and additive to earnings per share.
As the market digests the latest earnings report and forward-looking statements, Koppers’ stock reflects investor reaction to the mixed financial results and cautious outlook amidst a challenging economic landscape.
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