SunCoke Energy Inc (NYSE:SXC) reported its fourth-quarter and full-year 2025 financial results, delivering a top-line revenue beat but a bottom-line performance weighed down by significant one-time charges. The company's outlook for 2026, however, suggests a year of stabilization and improved profitability, even as the market initially reacted negatively to the report.
Earnings and Revenue Versus Estimates
The company's quarterly performance presented a mixed picture when held against analyst expectations. Revenue for the fourth quarter came in at $480.2 million, surpassing the consensus estimate of approximately $437.2 million. This beat was largely driven by the contribution from the recently acquired Phoenix Global business in the Industrial Services segment.
On the earnings front, SunCoke reported a net loss attributable to shareholders of $85.6 million, or $1.00 per share, for the quarter. This was a stark reversal from the net income of $23.7 million reported in the prior-year period. However, the results were heavily impacted by several one-time items. The company reported an Adjusted EBITDA of $56.7 million, and on a non-GAAP earnings per share basis, it posted $0.12. This non-GAAP EPS figure exceeded the analyst estimate of $0.09.
The primary drivers behind the reported net loss were substantial one-time charges totaling $95.7 million (pre-tax), which included:
- A non-cash asset impairment charge related to the closure of the Haverhill I cokemaking facility.
- Site closure costs primarily tied to Phoenix Global operating sites.
- Restructuring and transaction costs from the Phoenix Global acquisition.
Market Reaction and Price Action
Despite the revenue beat and a non-GAAP earnings beat, SunCoke's stock traded significantly lower in pre-market activity following the release. This negative reaction likely reflects investor focus on the sizable GAAP net loss, the lowered full-year 2025 Adjusted EBITDA compared to 2024, and the company's guidance for a modest decrease in Domestic Coke segment profitability in 2026. The market appears to be weighing the near-term headwinds and restructuring costs against the longer-term strategic benefits of the portfolio optimization.
Key Elements from the 2025 Results and 2026 Outlook
The press release outlined a year of strategic transition for SunCoke, marked by both challenges and diversification.
2025 Operational Highlights:
- Domestic Coke Segment Struggles: The core business faced multiple headwinds, including the breach of contract by customer Algoma, lower economics on a contract extension at Granite City, and a shift in sales mix away from higher-margin spot coke. This led to a 19.6% year-over-year decline in full-year segment Adjusted EBITDA to $170 million.
- Industrial Services Growth: The acquisition of Phoenix Global, which closed in 2025, provided a meaningful offset. The Industrial Services segment saw full-year revenue more than double and Adjusted EBITDA increase by 23.6% to $62.3 million.
- Portfolio Optimization: The company permanently closed its Haverhill I facility, taking an associated impairment charge, and revised its domestic coke production capacity to approximately 3.7 million tons.
2026 Guidance and Comparison to Estimates: Management provided a detailed outlook for 2026, forecasting a year of full utilization for its coke plants. The guidance sets consolidated Adjusted EBITDA between $230 million and $250 million. This range sits below the current analyst sales-based expectations for 2026, which are estimated at approximately $1.89 billion in revenue, indicating the market may have been anticipating stronger growth. The company expects:
- Domestic coke sales of approximately 3.4 million tons.
- Consolidated net income between $25 million and $43 million.
- Capital expenditures of $90-$100 million.
- Operating cash flow of $230-$250 million.
Capital allocation priorities for 2026 include debt reduction, continuation of the quarterly dividend, and assessment of growth opportunities.
Conclusion
SunCoke Energy's fourth-quarter results reflect a company in the midst of a strategic overhaul. While one-time charges marred the GAAP profitability, the underlying business showed resilience with a revenue beat and a non-GAAP earnings beat. The acquisition of Phoenix Global is beginning to deliver results, diversifying the company's earnings stream. The 2026 guidance points toward a stabilized, cash-generative year, though it appears to be set at a more conservative level than some analysts had projected. Investors will be watching for the successful integration of Phoenix Global and an improvement in terminal handling volumes to meet the full-year outlook.
For a detailed breakdown of future quarterly estimates and historical earnings performance, you can review the data on SunCoke's earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor does it recommend any investment action. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
