Orion Engineered Carbons (NYSE:OEC) reported a deeper-than-expected fourth-quarter loss on Tuesday, although revenue exceeded Wall Street projections, as the company continued to grapple with elevated tire imports and muted industrial demand.
Shares slipped 0.14% in after-hours trading following the release.
For the quarter, the specialty chemicals producer posted an adjusted loss of $0.34 per share, well below analyst expectations for a $0.06 loss. Revenue totaled $411.7 million, ahead of the $367.01 million consensus estimate.
Net sales for the fourth quarter declined 5% year over year, reflecting a 4% decrease in volumes and a 6% reduction in pricing, partly offset by a 4% positive impact from foreign currency translation.
Management pointed to historically high tire imports into the Western Hemisphere and weak demand across core Specialty Carbon Black end markets, particularly in transportation and polymers.
“Although down year over year, this was better than contemplated in our most recent guidance, as year-end destocking activity and customer production curtailments were not as pronounced as anticipated,” said Corning Painter, Chief Executive Officer.
For full-year 2025, Orion generated net sales of $1.8 billion, down 4% from the prior year, and recorded a net loss of $70.1 million. Results included an $81 million non-cash goodwill impairment charge booked in the third quarter.
The company said it is implementing further measures to stabilize profitability and enhance cash generation to reduce debt. These actions include scaling back growth capital expenditures, prioritizing maintenance spending on higher-return assets, and realigning its cost structure to match current demand levels.
“Internal efforts facilitated a significant cash release from working capital in 2025’s second half, which was a key contributor to our positive free cash flow generation for the full year,” added Jon Puckett, Chief Financial Officer.
Looking ahead to 2026, Orion projected adjusted EBITDA in a range of $160 million to $200 million and free cash flow between $25 million and $50 million, reflecting ongoing headwinds from subdued tire production and weak industrial activity.