World Kinect NYSE: WKC reported what executives described as an exceptional second quarter of 2026, with record adjusted earnings per share and record consolidated gross profit, helped by favorable market conditions tied to ongoing Middle East-related volatility and stronger execution across its aviation, marine and land businesses.
Chief Executive Officer Ira Birns said adjusted earnings per share of $1.29 marked “the highest quarterly adjusted EPS in our company’s history.” He cautioned, however, that the quarter should not be viewed as a normal run rate.
“We should also be clear that this was an exceptional quarter, and not every quarter will look like this,” Birns said. “As we look ahead, we are not assuming the market conditions we saw over the past few months will repeat.”
Record Gross Profit Despite Lower Volumes
Chief Financial Officer Jose-Miguel “Mike” Tejada said consolidated gross profit rose 50% year-over-year to $350 million, an all-time quarterly record for the company. Total volume declined 9%, which Tejada attributed primarily to lower demand associated with the Middle East conflict and businesses exited within the land segment.
Tejada said favorable market conditions that had supported first-quarter results lasted longer than the company initially expected, while potential market headwinds did not fully materialize. Price and volatility moderated from March and April peaks, but remained supportive enough for World Kinect to capture additional value.
Second-quarter non-GAAP adjustments totaled approximately $19 million, or $18 million after tax, according to Tejada. He said those adjustments excluded items such as restructuring and exit costs, impairments, results from non-core divestitures and other non-recurring items.
Aviation and Marine Deliver Record Segment Results
The aviation segment generated gross profit of $208 million, up 51% from a year earlier and a quarterly record for the segment. Aviation volume was 1.8 billion gallons, down 5% year-over-year, reflecting reductions in lower-margin volume and some demand disruption linked to the Middle East conflict.
Tejada said the largest driver of aviation’s performance was the company’s physical inventory business, which benefited from elevated jet fuel price movements and market structure. The segment also received expected contributions from the Universal Trip Support acquisition, which closed in the fourth quarter of 2025.
World Kinect said services represented about 18% of aviation gross profit, with services contributions more than doubling year-over-year. Tejada said this reflected the baseline benefit of Universal Trip Support and supported the company’s strategy of building a broader, more service-oriented aviation platform alongside fuel distribution.
Marine gross profit nearly tripled from the prior year to $80 million, also a segment record. Marine volume was 3.5 million metric tons, down 10% year-over-year, primarily due to lower demand tied to the Middle East conflict. Tejada said both the core resale business and certain physical supply locations benefited from elevated bunker fuel prices, increased volatility and disciplined yield management.
Land Transformation Nears Completion
Executives also pointed to progress in the land segment, where the company has been simplifying its portfolio. Birns said the sale of World Kinect’s North American tank wagon business was completed in June, and Tejada said the June 1 sale of tank wagon delivery and lubricants businesses “substantially completes” the land transformation underway over the past two years.
Land volume fell 12% year-over-year, and gross profit declined 8% to $62 million, largely due to businesses the company has exited. However, land operating income rose to $20 million from $1 million in the prior-year quarter, and operating margin expanded to more than 32% of gross profit.
Birns said the refocused land portfolio is now centered on Cardlock and retail. He said the company serves about 3,100 retail customers, up from roughly 2,900 a year ago, while still holding a modest share of a fragmented U.S. market.
“The portfolio is simpler, more focused, and performing better,” Birns said.
Guidance Raised, But Management Takes Measured View
World Kinect raised its full-year 2026 adjusted EPS guidance to a range of $3.20 to $3.40, up from its prior range of $2.65 to $2.85. Tejada said the increase principally reflects earnings already delivered in the first half and expectations for strong performance over the balance of the year.
Still, management emphasized that the second half outlook assumes a more measured level of performance than the record first half. In response to a question from Bank of America analyst Ken Hoexter about whether guidance was conservative given continued volatility, Tejada said market conditions are difficult to predict.
“The earnings principally reflects what we delivered in the first half,” Tejada said. “The markets are difficult to predict. Things are changing on a daily basis.”
In aviation, the company expects third-quarter gross profit to be up year-over-year, supported by Universal Trip Support and continued strength in the core fuel distribution business. Sequentially, however, aviation gross profit is expected to decline as second-quarter inventory-related benefits normalize.
For marine, Tejada said the company expects third-quarter gross profit to be up year-over-year but down sequentially, as the outlook does not assume a repeat of the second quarter’s exceptional market conditions.
Cash Flow, Credit Risk and Capital Returns
Operating cash flow was a use of approximately $21 million in the second quarter, while free cash flow was a use of approximately $35 million. Tejada said elevated commodity prices and volatility continued to increase working capital needs, particularly in aviation and marine. He added that the company had seen early signs of working capital improvement entering the third quarter.
The sale of the tank wagon and lubricants businesses returned approximately $85 million of cash to the company during the quarter.
Operating expenses rose 35% year-over-year to $233 million, driven by higher variable compensation tied to strong results, the inclusion of Universal Trip Support and a higher bad debt reserve. Tejada said the reserve reflected increased credit risk among certain customers amid elevated fuel prices and volatility, including one specific customer that sought credit protection.
During the quarter, World Kinect’s board approved a 15% increase to the quarterly dividend, and the company repurchased approximately $14 million of shares. Year-to-date repurchases totaled approximately $89 million.
Birns closed the call by saying the company is seeing benefits not only from market conditions but also from actions taken to strengthen execution and focus the business. “The business is more focused, our strategy is clear, and our teams are aligned around the areas where World Fuel has the strongest capabilities and the best opportunities to create value,” he said.
About World Kinect (NYSE:WKC)
World Kinect Energy Services, Inc NYSE: WKC is a global energy services company specializing in fuel procurement, supply chain management and risk mitigation solutions. The company offers an integrated platform that facilitates the sourcing, trading and logistics of refined fuels, natural gas, liquefied natural gas (LNG) and renewable energy products. Its services are designed to help industrial, commercial and institutional clients optimize energy costs, comply with environmental regulations and manage price volatility.
In addition to traditional commodity trading and delivery, World Kinect provides a suite of value-added services that include carbon offset and decarbonization strategies, energy efficiency consulting and emissions reporting.
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