Koppers Q2 2026 Earnings: Sales Rise as Margins Weaken

Koppers (NYSE: KOP) reported Q2 2026 net sales of $520.1 million, up 3.0% from $504.8 million a year earlier, while diluted EPS swung to a loss of $7.71 from earnings of $0.81. Adjusted EPS declined to $1.37 from $1.48, and adjusted EBITDA fell 7.9% to $71.0 million as higher costs, unfavorable RUPS pricing, and weaker Carbon Materials and Chemicals profitability outweighed volume growth. The quarter ended June 30, 2026.

Core earnings data

Excluding the net unfavorable effect of acquisitions, divestitures, and product-line rationalizations, as well as favorable currency translation, sales increased 5.1%. Performance Chemicals and utility-pole volumes were the main drivers, partially offset by weaker pricing and sales mix in Railroad and Utility Products and Services.

Profit moved in the opposite direction. Adjusted EBITDA declined because of higher raw-material, freight, and legal costs, unfavorable RUPS pricing, and the effect of 2025 divestitures. Lower operating costs and improved throughput from network optimization provided only a partial offset.

The gap between GAAP and adjusted results primarily reflected $215.8 million of impairment, restructuring, and plant-closure costs. These charges contributed to the reported operating and net losses, while adjusted results showed a smaller but still meaningful decline in underlying profitability.

Business and segment performance

Performance Chemicals was the only segment to deliver both higher sales and higher adjusted EBITDA. RUPS remained the largest business by revenue, but pricing and mix weakened its margin, while Carbon Materials and Chemicals recorded the sharpest earnings decline.

RUPS was affected by lower maintenance-of-way activity, the 2025 sale of the railroad services business, crosstie price reductions, and unfavorable sales mix. A 16% increase in domestic utility-pole volume—including an acquired western U.S. pole procurement business—and higher crosstie volumes partly offset those pressures.

Performance Chemicals benefited from an 11% volume increase, led by the Americas. Lower raw-material costs of $1.3 million, including the net benefit of copper hedging, also supported earnings, although lower European pricing and increased logistics expenses were offsets.

Carbon Materials and Chemicals increased sales through higher carbon black feedstock volumes and pricing and greater carbon-pitch volume. However, $9.2 million of higher raw-material, operating, and selling, general and administrative expenses drove the segment’s EBITDA decline. Savings from ending phthalic anhydride production at the Stickney, Illinois, facility provided only a partial offset.

Profitability, cash flow, and the balance sheet

The large GAAP loss was principally tied to charges that did not require an equivalent current-period cash outflow. For the six months ended June 30, operating and free cash flow reached company records as non-cash items were added back and working-capital usage improved through the timing of receipts and payments and lower inventory. The prior-year period also included approximately $14 million of pension funding associated with a settlement.

The cash-flow figures below cover the first six months of each year, while balance-sheet comparisons are against December 31, 2025.

Koppers also reported returning $47.4 million to shareholders during the first half through repurchases and quarterly dividends, compared with $32.4 million a year earlier. The company reduced long-term debt over the same period, consistent with management’s stated capital-allocation priorities.

2026 guidance

Koppers narrowed the upper ends of its adjusted EBITDA and adjusted EPS forecasts while leaving sales and cash-flow guidance unchanged. Management expects the more challenging margin environment, including input-cost and freight headwinds, to persist through the remainder of 2026 and indicated that profitability is likely to finish toward the lower end of the updated ranges.

The maintained cash-flow outlook depends partly on additional working-capital initiatives. Koppers does not provide GAAP reconciliations for adjusted EBITDA, adjusted EPS, or free cash flow guidance because certain restructuring, impairment, acquisition, hedging, and LIFO items cannot be forecast without unreasonable effort.

Recent insider transactions

Aggregate data supplied for the previous six months showed 188,328 shares purchased and 18,976 sold, resulting in net purchases of 169,352 shares. The latest individual records included three reported sales by Leroy M. Ball Jr., along with multiple stock awards and gifts; the data did not provide share quantities for these individual entries.

The reported values for gifts and awards should not be interpreted as open-market purchase or sale prices. The transaction data alone does not establish insiders’ views about the company’s outlook.

Risks investors should monitor

• Continued margin pressure: Koppers expects input and freight costs to remain headwinds, and its updated guidance points to profitability near the lower end of the forecast range.
• Weakness in RUPS and CMC: Unfavorable RUPS pricing and mix and substantially lower CMC profitability could continue to offset growth in Performance Chemicals.
• Restructuring execution: Future results depend partly on realizing savings from the accelerated Stickney closure and RUPS network optimization while managing associated costs and operational disruption.
• Cash-flow dependence on working capital: The maintained full-year cash-flow outlook relies partly on further working-capital initiatives after first-half cash generation benefited from payment timing and inventory reduction.
• Debt remains substantial: Long-term debt declined but remained $892.7 million at quarter-end, making continued debt reduction important to financial flexibility.

Summary

Koppers generated higher Q2 sales and record first-half cash flow, but the operating picture was mixed: Performance Chemicals improved, while pricing and cost pressure weakened RUPS and CMC margins. Large restructuring and impairment charges drove the GAAP loss, and lower underlying earnings led management to reduce the upper ends of adjusted EBITDA and EPS guidance. Execution on cost reductions, working-capital initiatives, and debt reduction will be central to performance through the remainder of 2026.