Huntsman (HUN) Financials

Huntsman’s Q2 2026 results show a meaningful sequential improvement in profitability, but the company’s broader financial trend remains mixed. Revenue increased to $1.663 billion from $1.420 billion in Q1 2026 and $1.458 billion in Q2 2025. Gross profit rose to $245 million, producing a 14.7% gross margin versus 12.9% in Q1. Operating income also improved from a $16 million loss in Q1 to $37 million of income in Q2.

Despite the operating recovery, Huntsman generated only $9 million of net income from continuing operations and a $6 million net loss attributable to common shareholders, or negative $0.03 per share. Interest and other expenses reduced pretax income by $11 million, while $13 million of earnings was attributed to noncontrolling interests. The company also reported a $2 million loss from discontinued operations.

The longer-term revenue trend is less encouraging. Quarterly revenue has generally declined from $2.011 billion in Q3 2022 to $1.506 billion in Q3 2023, $1.452 billion in Q4 2024, and $1.355 billion in Q4 2025, before recovering in the first half of 2026. Profitability has also deteriorated from the 2022 level, when Huntsman produced a 17.4% gross margin and $138 million of operating income in Q3, compared with a 14.7% gross margin and $37 million of operating income in Q2 2026.

Cash flow is the most significant near-term concern. Huntsman used $60 million in operating cash during Q2 2026, following a $53 million outflow in Q1. The primary driver was a $165 million use of cash from changes in operating assets and liabilities, suggesting that working capital absorbed substantial funds. This compares with positive operating cash flow of $91 million in Q2 2025 and $46 million in Q2 2024.

The balance sheet provides some liquidity, but cash has declined. Cash and equivalents stood at $692 million at the end of Q2 2026, down from $738 million in Q1 2026 and $798 million in Q2 2025. Total debt was approximately $4.17 billion, consisting of $728 million of short-term debt and $3.446 billion of long-term debt. The current ratio was approximately 1.33, indicating coverage of current liabilities but limited excess liquidity for a cyclical chemical manufacturer.

• Sequential earnings recovery: Q2 2026 operating income improved to $37 million from a $16 million loss in Q1 2026, while net income from continuing operations rose to $9 million from a $40 million loss.
• Revenue rebound: Q2 2026 revenue increased approximately 17% sequentially and 14% year over year, reversing part of the weakness seen through 2025.
• Improved gross profitability: Gross margin expanded to about 14.7% in Q2 2026 from 12.9% in Q1 and 12.5% in Q2 2025.
• Lower restructuring burden: Restructuring charges fell to $9 million in Q2 2026 from $124 million in Q2 2025, helping operating income return to positive territory.
• Capital investment remains active: Huntsman spent $30 million on property, plant and equipment in Q2 2026, below the $38 million spent in Q1 and $37 million in Q2 2025. This may support future operations, although it continues to consume cash.
• Liquidity remains adequate but weakening: The company had $692 million of cash and a current ratio near 1.33 at quarter-end, but cash has declined from $798 million a year earlier and $1.104 billion in Q1 2024.
• Operating cash flow turned sharply negative: Huntsman used $60 million in operating cash in Q2 2026, primarily because operating assets and liabilities consumed $165 million.
• Common shareholders remain unprofitable: Q2 2026 net income attributable to common shareholders was negative $6 million, producing negative EPS of $0.03 despite positive consolidated net income.
• Revenue and margins remain below earlier-cycle levels: Revenue and gross margins are still well below Q3 2022 levels, indicating that the latest improvement may represent a recovery from depressed conditions rather than a return to prior peak performance.
• Debt and financing dependence remain important risks: Total debt rose to approximately $4.17 billion, while Q2 financing included $36 million of new debt issuance. Huntsman also paid $44 million in dividends despite negative operating cash flow.

Overall, Huntsman’s latest quarter suggests that operating conditions may be stabilizing, particularly as restructuring costs decline and revenue improves. However, negative operating cash flow, declining cash reserves, substantial debt, and continued losses for common shareholders remain important risks. Investors should look for sustained positive operating cash flow and several quarters of improved margins before treating the Q2 rebound as a durable turnaround.