Earnings Analysis November 6, 2026

Koppers Holdings Inc. ($KOP) Q3 FY2026 Earnings Analysis: Revenue and Adjusted EPS Miss Estimates, Annual Profit Forecast Lowered

Earnings Report

Revenue: $499.1 million (Q3 FY2026, +2.8% YoY, expected $518 million) ❌ Miss

EPS (Earnings Per Share): Adjusted $0.77 (Q3 FY2026, expected $1.35) ❌ Miss

Guidance: Lowered 2026 annual adjusted EPS to $3.10~$3.25 (previously $3.80~$4.20); lowered revenue to $1.9 billion (previously $1.9 billion~$2.0 billion); maintained operating cash flow at $165 million~$185 million; raised free cash flow to $115 million~$135 million

Stock Reaction: -7.58% in regular session ($39.64, as of 06:03 on 11-06 KST)

What Went Well

Wood Preservative Growth: Revenue for this segment in Q3 FY2026 increased by 11.9% to $161.5 million.

Improved Cash Generation: Free cash flow from January to September 2026 reached a record cumulative high of $92 million.

Debt Reduction: Total debt at the end of September 2026 was $888.2 million, a decrease of $31 million compared to the end of the year.

Sales in the wood preservative segment increased due to market share expansion and customer inventory replenishment. Improvements in cash flow reflected reduced inventory, the timing of customer collections and supplier payments, and the impact of pension payments in the previous year.

What Went Poorly

Decrease in Adjusted Earnings: Adjusted EPS for Q3 FY2026 was $0.77, a 36.4% decrease compared to the same period last year.

Worsening Profitability in Carbon Segment: Adjusted EBITDA for Q3 FY2026 decreased by 60.9%.

Lowered Annual Earnings Outlook: The 2026 adjusted EPS outlook was lowered from $3.80~$4.20 to $3.10~$3.25.

Rising raw material and logistics costs outweighed the effects of increased sales volume and cost improvements. In the carbon materials and chemicals segment, profits were pressured by rising raw material costs, as well as lower utilization rates due to raw material quality issues and early plant closures.

What the Company Said

CEO and Chairman Leroy Ball explained that it is difficult to recover the increases in raw material and logistics costs in the short term. The company cited operational measures and plant reorganization effective in 2027 as the basis for profit improvement, and plans to continue cash generation through working capital management in the immediate term.

Market Reaction and Future Key Points

The factors contributing to the downward pressure on the stock price confirmed in this earnings report are the revenue and adjusted earnings per share (EPS) missing expectations, along with a downward revision of the annual profit outlook. Despite an improved cash flow outlook, pressure from raw material and logistics costs is expected to continue through the end of the year.

It remains to be seen how much selling price adjustments and cost reductions in the next quarter will offset the rising raw material and logistics costs.

It is necessary to monitor whether the increase in sales volume and improvement in profitability in the wood preservative segment continue.

It must be confirmed whether the improvement in cash flow persists beyond the effects of the timing of collections and payments.

Earnings Call Key Summary

Once the company script is released following the earnings call, the key takeaways from the call will be added to this section. We will select and summarize only the most important points, such as how management explained the results and outlook, and what questions analysts asked.