GrafTech Stock Falls On Margins Pressure; Q2 Earnings Tops Estimates

GrafTech International Ltd EAF reported second-quarter sales growth of 17.8% year-over-year to $330.75 million, beating the consensus of $301.2 million.
Adjusted EPS improved to $0.43 from $0.37 in 2Q20, beating the consensus of $0.37.
Sales volume increased 16% sequentially and 39% Y/Y. Production volume increased 22% sequentially and 33% Y/Y.
The gross margin contracted to 39% from 53.5%.
The operating profit decreased to $52.08 million from $133.41 million, and the margin contracted by around 3,180 bps to 15.6%.
Adjusted EBITDA increased by 5.8% Y/Y to $159.9 million, and margin contracted by 550 bps to 48.3%.
GrafTech generated cash from operating activities year-to-date of $208.76 million and adjusted Free cash flow of $244.16 million.
The company had cash and cash equivalents of $114 million and total debt of ~$1.2 billion at the end of the quarter.
GrafTech reported sales volumes of 43 thousand MT, consisting of LTA volumes of 27 thousand MT, at an average price of $9,500 per MT, and non-LTA volumes of 16 thousand MT, at an average price of $4,100 per MT.
Full-year 2021 capital expenditure range expectations are unchanged at $55 million - $65 million.
Price Action: EAF shares are trading lower by 5.16% at $10.84 on the last check Friday.

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