GrafTech Stock Slips On Q2 Revenue Miss, Warning On Challenging Operating Environment

GrafTech International Ltd EAF reported second-quarter sales growth of 9.9% year-over-year to $363.65 million, missing the consensus of $368.3 million.
Adjusted EPS was $0.44, beating the consensus of $0.43.
Sales volume of 42 thousand metric tons, a decrease of 1% Y/Y; and Production volume of 44 thousand MT, an increase of 1% Y/Y.
The weighted-average realized price for LTA volume for the quarter was $9,600 per MT.
Gross margin expanded 562 bps to 44.6%. The operating profit increased to $143.39 million (+175.3% Y/Y), and the margin expanded by 2,370 bps to 39.4%.
GrafTech generated cash from operating activities year-to-date of $206.44 million, compared to $208.76 million a year ago. Adjusted free cash flow was $177.53 million.
Adjusted EBITDA decreased by 1.1% Y/Y to $158.2 million, and margin contracted by 484 bps to 43.5%.
As of June 30, 2022, GrafTech had cash and equivalents of $56 million and total debt of ~$920 million.
Outlook: The company stated that the near-term outlook is becoming more challenging with higher raw material, energy, and logistics costs and the impact of the ongoing conflict between Ukraine and Russia.
GrafTech expects FY22 capital expenditures of $70 million - $80 million.
Price Action: EAF shares are trading lower by 6.45% at $7.18 on the last check Friday.

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