Olin NYSE: OLN executives said the company expects a sharp sequential improvement in second-quarter earnings as higher pricing, seasonal demand and cost reductions begin to flow through results following a challenging but improving first quarter.
Speaking on Olin’s first-quarter 2026 earnings call, President and CEO Ken Lane said the company operated in a “very dynamic” environment while focusing on safety, reliability, liquidity and cost reduction through its Beyond 250 program. Lane said first-quarter results showed early progress, including a return to profitability in the Epoxy business and signs of improving demand for Winchester commercial ammunition.
Olin guided for second-quarter adjusted EBITDA of $160 million to $200 million. During the question-and-answer session, Alembic Global Advisors analyst Hassan Ahmed noted that Olin generated about $86 million of EBITDA in the first quarter, asking for a bridge to the midpoint of the second-quarter outlook. Lane said the largest driver of the expected improvement would be the company’s Chlor Alkali Products and Vinyls, or CAPV, segment, supported by higher pricing and volumes as assets return to service.
Chlor-Alkali Outlook Improves on Pricing and Supply Disruptions
Lane said the company’s chlor-alkali and vinyls business benefited in the first quarter from lower operating costs, including savings from Beyond 250 and lower-than-expected maintenance turnaround costs. Merchant chlorine demand was seasonally soft but improved from the fourth quarter as year-end destocking ended, while demand into water treatment and crop protection rebounded in mid-March as U.S. temperatures warmed.
Caustic soda remained the stronger side of the electrochemical unit, or ECU, Lane said, with stable global demand and tightening supply. He said several Asian vinyls producers had declared force majeure because of limited feedstock access and rapidly rising costs, constraining chlor-alkali production and reducing availability of co-produced caustic soda. Trade publications estimated that 6% to 9% of annual global vinyls capacity was affected, according to Lane.
The disruption contributed to a sharp increase in global pricing in late March, though Lane said levels had moderated as inventories were depleted. U.S. export EDC prices rose significantly since January, and Olin expects EDC and caustic soda pricing to stabilize at higher levels than earlier in the year as shortages persist and production costs remain elevated.
Lane also said Olin has announced $185 per ton in domestic caustic soda price increases for implementation in the first half of 2026 and is working to implement the balance of those announcements.
Epoxy Returns to Profitability
Olin’s Epoxy business returned to profitability in the first quarter, which Lane called an “important milestone.” He said the company expects full-year Epoxy performance to improve meaningfully, helped by regional rationalizations in Europe, cost actions and growth in higher-margin Formulated Solutions markets such as electronics, semiconductors and power generation.
Lane said Olin’s European cost structure is on track to deliver $40 million to $50 million of annual improvement. He also pointed to the recent closure of the company’s plant in Guarujá, Brazil, which he said would further improve the cost structure and strengthen supply integration.
Olin is also seeking higher Epoxy pricing after what Lane described as significant pressure from subsidized Asian supply. The company announced March and April epoxy resin price increases totaling more than $1,200 per ton in North America and EUR 1,300 per metric ton in Europe. Lane said the increases are expected to offset higher feedstock and transportation costs.
Winchester Sees Commercial Ammunition Recovery
Lane said Winchester’s first-quarter performance improved significantly after actions in the second half of last year to rebalance channel inventories and improve commercial volume and pricing. Retail shipments are moving back into alignment with out-the-door sales, he said.
As retailer purchases align with demand, Olin expects a mid- to high-single-digit year-over-year uplift in commercial volume. Raw material costs remain a headwind, particularly copper, brass and propellants. Lane said pricing actions should offset the majority of 2025 cost inflation once implemented, though he expects cost pressure to continue through the year.
Winchester is operating under a “make-to-demand” model intended to align with Olin’s value-first commercial strategy, Lane said. He described Winchester as a core part of Olin’s portfolio, citing its brand, retailer relationships, U.S. military business and international customer base.
Liquidity, Cost Savings and Debt Reduction Remain Priorities
SVP and CFO Todd Slater said Olin’s top financial priority remains generating cash flow to preserve and enhance liquidity. In February, the company amended its bank credit facilities to provide greater covenant flexibility through late 2027. Slater said Olin has full access to its revolving credit facility and $1.3 billion of available liquidity.
Slater said Olin has no debt maturities before 2029 and expects net debt to rise during the first half of 2026 as it makes payments to resolve legacy litigation matters. The company expects 2026 to be essentially cash-tax free, plus or minus $20 million, after anticipated refunds related to clean hydrogen production tax credits under Section 45V of the Inflation Reduction Act of 2022.
Olin is targeting about $200 million in capital spending for 2026, focused on sustaining capital to support safe and reliable operations. Slater said the company expects to continue its nearly century-long history of uninterrupted quarterly dividend payments and use remaining excess cash flow to reduce debt. Olin expects to end the year with a leverage ratio just above 4 times, while maintaining a long-term goal of averaging below 2 times leverage across the cycle.
Slater also said Olin expects to deliver $100 million to $120 million of incremental savings in 2026 under Beyond 250, after delivering $44 million of structural savings last year. The program is designed to remove more than $250 million of cumulative structural costs by 2028.
Second-Quarter Guidance Includes Freeport Outage
Lane said the second-quarter outlook includes the estimated impact of an unplanned vinyls outage at Olin’s Freeport, Texas, plant. The company expects to restart those assets late next week. In response to a question from Vertical Research Partners analyst Kevin McCarthy, Lane said Olin had successfully completed a planned turnaround at the site ahead of schedule and on budget before the unplanned event occurred.
Lane said Olin is not yet near normalized or mid-cycle earnings levels, even with the expected second-quarter improvement. He said the company sees additional upside as demand recovers in housing, infrastructure and general construction, and as chlor-alkali supply-demand dynamics improve amid limited new capacity and likely further rationalization.
“There is still much more leverage here in Olin still to come,” Lane said during the call.
About Olin NYSE: OLN
Olin Corporation is a diversified manufacturer specializing in chemical products and ammunition. The company's core business activities encompass the production and distribution of chlor-alkali products, epoxy resins and derivatives, and small-caliber ammunition under the Winchester brand. Olin's chemical operations supply chlorine, caustic soda and related co-products to a wide range of end markets, including water treatment, pulp and paper, pharmaceuticals and general industrial applications.
In its Chlor Alkali Products & Vinyls segment, Olin operates multiple manufacturing facilities that produce chlorine and sodium hydroxide, along with vinyl chloride monomer and polyvinyl chloride (PVC) compounds.
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