Can EAF sustain its EPS momentum into 2025?

**GrafTech International (EAF) faces challenges in sustaining its EPS momentum into 2025.** Here's an analysis based on recent performance and industry trends:

1. **Recent Performance**: GrafTech's EPS has shown volatility, with a significant decline in EPS from $1.48 in 2022 to -$0.51 in 2024. The company reported a net loss of $49 million for Q4 2024, with an EPS of -$0.19 per share. This indicates that GrafTech is currently experiencing financial strain.

|code|Ticker|Name|Date|Diluted EPS YoY|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|EAF|EAF.N|GrafTech|2022 Q1|27.027027027027025|0.47|169|
|EAF|EAF.N|GrafTech|2022 Q2|300|0.44|169|
|EAF|EAF.N|GrafTech|2022 Q3|-20.000000000000004|0.36|169|
|EAF|EAF.N|GrafTech|2023 Q1|-106.38297872340425|-0.03|169|
|EAF|EAF.N|GrafTech|2023 Q2|-106.81818181818181|-0.03|169|
|EAF|EAF.N|GrafTech|2023 Q3|-125|-0.09|169|
|EAF|EAF.N|GrafTech|2023 Q4||-0.85|169|
|EAF|EAF.N|GrafTech|2024 Q1|-300|-0.12|169|
|EAF|EAF.N|GrafTech|2024 Q2|-100|-0.06|169|
|EAF|EAF.N|GrafTech|2024 Q3|-55.55555555555558|-0.14|169|

2. **Industry Trends**: The graphite electrode industry is facing challenges, including low capacity utilization and weak pricing dynamics. Additionally, the global steel industry's uncertainty and geopolitical conflicts are affecting demand for graphite electrodes. These factors are likely to impact GrafTech's profitability in the near term.
3. **Strategic Initiatives**: Despite the challenges, GrafTech has implemented initiatives to grow volume, reduce costs, and manage working capital. The company has also successfully completed financing transactions to bolster liquidity and extend debt maturities. These strategic moves could provide a foundation for potential EPS improvement if market conditions stabilize.
4. **Market Expectations**: Analysts expect GrafTech to deliver a year-over-year increase in earnings on lower revenues when reporting Q4 2024 results. This suggests that while there may be some improvement in earnings, revenue declines could limit the sustainability of EPS momentum.
5. **Financial Position**: GrafTech's gross debt stood at $1.125 billion, with net debt approximately $869 million. The company's liquidity position, with total liquidity of $464 million, indicates a need for careful financial management to support EPS stability.

In conclusion, while GrafTech's strategic initiatives and improved financial position offer some support, the sustained volatility in EPS and the challenging industry environment make it uncertain whether GrafTech can sustain its EPS momentum into 2025 without significant improvements in market conditions and operational performance.