Suncoke Energy (SXC) Tops Q2 EPS by 15c, Revenues Beat; Provides Revised FY20 Fiscal Outlook

Suncoke Energy (NYSE: SXC) reported Q2 EPS of $0.08, $0.15 better than the analyst estimate of ($0.07). Revenue for the quarter came in at $338 million versus the consensus estimate of $239.1 million.

"We recognize that COVID-19 has significantly impacted the steel industry as evident from recent steel capacity utilization rates. In response to the market challenges presented by COVID-19, we have taken proactive actions to work with our customers and provide near-term coke supply relief in exchange for extending existing contracts," said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc. "We expect the impact of these short-term relief measures, net of cost savings initiatives, will result in a $40 - $50 million reduction in 2020 Adjusted EBITDA. We are pleased to have successfully addressed short-term market challenges with our customers while simultaneously assuring long term stability for our stakeholders."

Rippey added, "In addition to the significant progress we have made with our customer contracts, we are also evaluating our cost structure to ensure that we remain a low cost coke and logistics service provider. We have taken certain actions, which while difficult during these unprecedented times, will help better position SunCoke for the future. We anticipate that these initiatives will achieve full year savings of approximately $10 million in 2021. We are also working on a transformational project to produce and sell foundry coke beginning in 2021. This alternative product will provide customer diversification and help address current blast furnace coke market dynamics."

2020 Revised Outlook

Our 2020 guidance, is as follows:

• Domestic coke production is expected to be approximately 3.75 million tons
• Domestic coke Adjusted EBITDA/ton is expected to be between $53 to $54/ton
• Consolidated Adjusted EBITDA is expected to be between $190 to $200 million
• Capital expenditures are projected to be approximately $80 million which includes approximately $12 million for foundry coke
• Free Cash Flow is estimated to be between $36 million and $56 million
• Cash taxes are projected to be between $0 to $4 million

For earnings history and earnings-related data on Suncoke Energy (SXC) click here.

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