Orion Engineered Carbons (NYSE: OEC) reported Q3 EPS of $0.51, in-line with the analyst estimate of $0.51. Revenue for the quarter came in at $394 million versus the consensus estimate of $375.5 million.

• Revenue increased $59.1 million, or 17.6%, to $394.0 million compared to the third quarter of 2017
• Volumes decreased by 6.2 kmt or 2.3% to 266.7 kmt compared to 272.9 kmt in the third quarter of 2017 due to the consolidation of our manufacturing footprint in South Korea
• Profit (Net Income) increased by $9.1 million to $24.2 million from $15.1 million in third quarter of 2017 and accordingly Basic EPS increased by $0.14 to $0.40, while Adjusted EPS1 increased $0.13 to $0.51
• Adjusted EBITDA1 increased $8.5 million or 13.2% to $72.6 million
• Specialty Carbon Black Adjusted EBITDA decreased $5.6 million or 14.1% to $34.7 million
• Rubber Carbon Black Adjusted EBITDA increased $14.2 million or 59.6% to a quarterly record $37.9 million
• Dividend payments of $0.20 per share

“Orion delivered another outstanding quarter, with our Rubber segment achieving a record quarterly profit. These strong results were seen across the entire Rubber segment, due to solid execution, a continued focus on improving the technical mix of rubber products, and stronger spot pricing supported by a robust market environment. Excluding the impact of the closure of one plant in South Korea, rubber volumes increased by 2.7% compared to the prior year third quarter, reflecting a strong demand environment in all regions. Total Rubber volumes were down by 2.1% due to the South Korean closure which was targeted at improving operational efficiency and eliminating less profitable rubber grades. Profitability in our Specialty segment was in line with our expectations, as the anticipated rise in oil costs experienced this summer moved through our P&L and brought per ton profits more towards equilibrium after an exceptionally high second quarter result,” said Corning Painter, Orion’s Chief Executive Officer. He continued, “This is my first quarter as CEO, and I am thrilled to join the Orion team and look forward to building upon the momentum from this quarter. We remain committed to the strategy we have in place and are focused on driving profitable growth as a global leader in the carbon black industry, positioned to further penetrate emerging markets and build on the success of our technical and specialty capabilities. I am extremely excited for this opportunity as Orion is well positioned for future financial and operational growth.”

2018 Full Year Outlook

“We are pleased with our strong performance this year, with high capacity utilization levels, improved pricing and good execution by our team. The first three quarters of this year have seen solid profitability with a couple of record setting quarters. We are reaffirming our full year 2018 guidance range provided at the end of the last quarter, namely for an adjusted EBITDA range of $285 to $300 million, with a weighting above the midpoint of this range assuming oil prices and foreign exchange rates are at third quarter 2018 levels. We are determined to manage any further rise in energy costs, adverse foreign exchange effects, and potential headwinds associated with trade tariffs and other political uncertainties. Contract negotiations for 2019 are well advanced in the Rubber business having been completed with most key customers. The outcome underpins this business for 2019. With significant price increases largely secured for the Rubber business, tightness in key markets, an expectation of continued high performance from our Specialty business, we are looking forward to 2019,” stated Mr. Painter. “Taking a slightly longer view of our business, the acquisition of SN2A adds a further dimension to our business by bringing us a skilled team, proven technology, and an operating plant making Acetylene carbon black, a new carbon black for our portfolio. With this platform we will attack the lithium ion battery market and broaden our position in other attractive markets. Furthermore this bolt-on acquisition is an affirmation of our strategy and a perfect fit with Orion’s focus on specialty carbon blacks. We are excited to welcome the SN2A team to Orion and bringing Acetylene carbon black into our industry leading technology portfolio,” continued Mr. Painter.

For earnings history and earnings-related data on Orion Engineered Carbons (OEC) click here.