SunCoke reported a 60% surge in EBITDA for the second quarter of 2026, yet its shares fell 13% during the same period.
The Industrial Services segment achieved its highest adjusted EBITDA since the Phoenix acquisition. Management said the acquisition is delivering ahead of expectations, with the targeted $5 million to $10 million in annual synergies already achieved. The company also realized a one-time benefit from extraordinary slag sales at Phoenix, which is not expected to repeat at the same scale in the second half of the year.
Operationally, the Middletown turbine was successfully returned to service in May 2026. Management confirmed the company is sold out for the full year 2026, and described the 20% sequential volume increase in Q2 as 'extraordinary.' However, terminal volumes are expected to normalize toward Q1 levels (approximately 5.6 million tons) rather than maintaining the 6.7 million ton peak seen in Q2.
SunCoke's EBITDA increased by 60% in Q2 2026 compared to the prior year.
Full-year 2026 consolidated adjusted EBITDA guidance was raised to a range of $250 million to $265 million, up from the original $60 million to $61 million EBITDA baseline for Phoenix. Operating cash flow guidance was also increased to $240 million to $260 million. The guidance incorporates insurance recovery proceeds for business interruption from the Middletown turbine outage.
The company noted several headwinds and tailwinds during the quarter. The Haverhill 1 shutdown acted as a headwind to Coke sales volumes. Employee expense accruals increased due to strong financial performance exceeding internal targets. Supply chain and energy concerns from geopolitical tensions in the Middle East are cited as factors supporting elevated coal prices and terminal demand. Additionally, the company saw some favorable impact from the FOB New Orleans price kicker in two out of three months in Q2.
We are sold out for the full year 2026.
