Koppers Holdings 2025 Q2 Earnings Net Income Falls 38.8% to $16.40 million

Koppers Holdings (KOP) reported its fiscal 2025 Q2 earnings on August 8, 2025. The results missed expectations, with both revenue and net income declining year-over-year. The company revised its 2025 sales and EBITDA guidance downward amid soft demand and ongoing cost transformation initiatives.

Revenue
Revenue for the quarter fell 10.4% year-over-year to $504.80 million. The decline was attributed to weaker performance across key segments. Specifically, the Railroad and Utility Products and Services segment reported revenue of $250.40 million, the Performance Chemicals segment generated $150.80 million, and the Carbon Materials and Chemicals segment contributed $103.60 million. Collectively, these segments reflected a broad-based slowdown in market demand.

Earnings/Net Income
Net income plummeted to $16.40 million for 2025 Q2, a 38.8% decline from $26.80 million in the same period last year. Earnings per share (EPS) fell 35.7% to $0.83, compared to $1.29 in 2024 Q2. The sharp contraction in profitability was driven by a challenging demand environment and lower volume across multiple business lines. These results indicate a difficult operating environment for the company despite ongoing cost-cutting measures.

Post-Earnings Price Action Review
Post-earnings, the stock of Koppers Holdings experienced mixed price action. A strategy of buying shares following the earnings report and holding for 30 days returned a moderate CAGR of 12.17%, underperforming the benchmark by 7.57 percentage points. Despite a low maximum drawdown of 0.00% and a Sharpe ratio of 0.34, the stock's high volatility—36.26%—underscored the uncertainty in the market's response to the earnings.

CEO Commentary
Leroy Mangus Ball, CEO & Chairman, emphasized the company's transformation into a high-performance organization and outlined progress on cost reduction and operational efficiency. He highlighted a 13% year-to-date reduction in SG&A expenses, an 11% decline in full-time employees, and $50 million in Q2 cash flow. Ball also noted that adjusted EBITDA margins exceeded 15% for the first time in 8 years. However, he acknowledged challenges in key markets, including PC volumes and CM&C performance at trough levels and sluggish growth in RUPS.

Guidance
Koppers Holdings revised its 2025 consolidated sales guidance to a range of $1.9 billion–$2 billion, down from the prior $2.1 billion. Adjusted EBITDA guidance was also lowered to $250 million–$270 million, from $262 million. Ball projected 2025 adjusted EPS of $4–$4.60, a mid-single-digit increase at the midpoint compared to 2024. The company also reduced its capital spending forecast to $52 million–$58 million, down from $74 million in 2024.

Additional News
On August 25, 2025, Koppers Holdings announced the completion of the Catalyst transformation initiative, which is expected to unlock margin improvements by 2027. The initiative has already led to significant cost savings and operational efficiencies. Additionally, the company sold its Railroad Structures division to a private equity firm, focusing its strategic efforts on core businesses. This move is expected to generate $120 million in proceeds and reduce long-term capital commitments. In other developments, Koppers announced a new sustainability initiative, aiming to reduce carbon emissions by 30% over the next five years. The company also unveiled plans to expand its carbon materials business in Europe, with an expected investment of $80 million.