SunCoke Energy (NYSE:SXC) Releases Quarterly Earnings Results, Misses Estimates By $0.13 EPS

Key Points

• SunCoke reported Q1 EPS of ($0.05), missing consensus by $0.13, while revenue topped estimates at $455.1 million; the quarter produced a net loss and a negative net margin of 2.41%.
• Management reaffirmed full-year consolidated Adjusted EBITDA guidance of $230–$250 million after Q1 Adjusted EBITDA of $56.5 million, with the industrial services segment delivering $26.2 million and a segment guide of $90–$100 million.
• Q1 was hit by severe winter weather and outages (including a Middletown turbine failure expected to be roughly a $5 million Q2 headwind), but the company ended with strong liquidity—$104.4 million cash and $262 million total liquidity—and will continue paying a $0.12 quarterly dividend (about a 7.1% yield) while using free cash flow to reduce debt and return capital.

SunCoke Energy (NYSE:SXC - Get Free Report) issued its quarterly earnings data on Thursday. The energy company reported ($0.05) EPS for the quarter, missing the consensus estimate of $0.08 by ($0.13), Zacks reports. The firm had revenue of $455.10 million for the quarter, compared to the consensus estimate of $416.15 million. SunCoke Energy had a negative net margin of 2.41% and a positive return on equity of 7.43%. The business's revenue was up 4.4% on a year-over-year basis. During the same period last year, the company posted $0.20 earnings per share.

Here are the key takeaways from SunCoke Energy's conference call:

• SunCoke reported consolidated Adjusted EBITDA of $56.5 million in Q1 and is reaffirming full-year consolidated Adjusted EBITDA guidance of $230 million–$250 million, citing full-year sell-out and the Phoenix integration as key drivers.
• Q1 performance was weighed down by severe winter weather, the Middletown turbine failure, and the Haverhill One shutdown, contributing to a year-over-year decline in Adjusted EBITDA and a net loss of $0.05 per share.
• The industrial services segment delivered $26.2 million of Adjusted EBITDA (vs. $13.7 million a year ago) driven by the addition of Phoenix and improving terminal volumes, and management reaffirmed full-year guidance of $90 million–$100 million for the segment.
• Liquidity and cash generation remain strong with $104.4 million cash, $158 million revolver availability and $262 million of total liquidity; the company generated $72.7 million of operating cash flow, paid a $0.12 quarterly dividend (27th consecutive quarter), and plans to use free cash flow to pay down debt and return capital to shareholders.
• Middletown’s turbine is expected to resume power late in Q2, but management estimates the outage will be roughly a $5 million headwind in Q2 with the majority of the impact recoverable in Q3–Q4.

SunCoke Energy Stock Up 1.7%

Shares of NYSE:SXC traded up $0.12 during trading on Thursday, reaching $6.81. 2,499,753 shares of the stock traded hands, compared to its average volume of 1,070,697. The stock has a 50-day moving average of $6.27 and a two-hundred day moving average of $7.04. SunCoke Energy has a 52-week low of $5.51 and a 52-week high of $9.28. The company has a debt-to-equity ratio of 1.10, a quick ratio of 1.11 and a current ratio of 2.11. The stock has a market cap of $577.34 million, a P/E ratio of -13.09 and a beta of 0.87.

SunCoke Energy Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, June 2nd. Shareholders of record on Friday, May 15th will be paid a dividend of $0.12 per share. The ex-dividend date of this dividend is Friday, May 15th. This represents a $0.48 dividend on an annualized basis and a dividend yield of 7.1%. SunCoke Energy's dividend payout ratio (DPR) is currently -92.31%.

Insider Activity at SunCoke Energy

In other news, SVP Phillip Michael Hardesty bought 12,500 shares of the stock in a transaction that occurred on Wednesday, February 25th. The shares were bought at an average price of $5.83 per share, for a total transaction of $72,875.00. Following the purchase, the senior vice president owned 298,677 shares in the company, valued at $1,741,286.91. This represents a 4.37% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is available through this link. Also, CFO Mark W. Marinko bought 10,000 shares of the stock in a transaction that occurred on Wednesday, February 25th. The shares were purchased at an average price of $5.84 per share, for a total transaction of $58,400.00. Following the purchase, the chief financial officer owned 71,798 shares in the company, valued at $419,300.32. This represents a 16.18% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Company insiders own 1.66% of the company's stock.

Hedge Funds Weigh In On SunCoke Energy

A number of institutional investors and hedge funds have recently made changes to their positions in SXC. Gendell Jeffrey L boosted its stake in shares of SunCoke Energy by 82.3% during the 4th quarter. Gendell Jeffrey L now owns 1,472,040 shares of the energy company's stock worth $10,599,000 after purchasing an additional 664,528 shares during the period. Invesco Ltd. raised its holdings in shares of SunCoke Energy by 72.0% in the 2nd quarter. Invesco Ltd. now owns 1,445,764 shares of the energy company's stock valued at $12,419,000 after purchasing an additional 605,366 shares in the last quarter. Federated Hermes Inc. raised its holdings in shares of SunCoke Energy by 65.5% in the 4th quarter. Federated Hermes Inc. now owns 1,422,356 shares of the energy company's stock valued at $10,241,000 after purchasing an additional 562,739 shares in the last quarter. Charles Schwab Investment Management Inc. raised its holdings in shares of SunCoke Energy by 30.5% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 2,153,408 shares of the energy company's stock valued at $15,505,000 after purchasing an additional 503,500 shares in the last quarter. Finally, Balyasny Asset Management L.P. grew its holdings in SunCoke Energy by 119.5% in the fourth quarter. Balyasny Asset Management L.P. now owns 759,682 shares of the energy company's stock worth $5,470,000 after purchasing an additional 413,579 shares during the last quarter. 90.45% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

Several equities analysts have recently commented on SXC shares. B. Riley Financial lowered their price objective on shares of SunCoke Energy from $10.00 to $9.00 and set a "neutral" rating for the company in a research note on Wednesday, February 18th. Weiss Ratings downgraded shares of SunCoke Energy from a "hold (c-)" rating to a "sell (d)" rating in a research note on Tuesday, March 3rd. One analyst has rated the stock with a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Reduce" and a consensus target price of $9.00.

About SunCoke Energy

SunCoke Energy, Inc is a leading independent producer of metallurgical coke and related products for the steel and foundry industries. The company specializes in manufacturing both blast furnace coke and foundry coke, offering high‐quality, low‐sulfur coal products that serve as essential inputs in steelmaking and metal casting processes. In addition to coke production, SunCoke provides comprehensive engineering, maintenance and environmental solutions tailored to the needs of integrated steel mills and foundries.

The company operates a network of coke production facilities across the United States, including plants in Indiana, Ohio, West Virginia and Louisiana.

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