Quaker Chemical's Q2 Earnings Beat, Sales Rise on Volume Growth

Quaker Chemical Corporation KWR posted second-quarter 2026 net earnings of $26.8 million or $1.55 per share, up sharply from a loss of $66.6 million or $3.78 per share in the year-ago quarter. 

Barring one-time items, adjusted earnings increased 28.1% year over year to $2.19 per share. It beat the Zacks Consensus Estimate of $1.68 per share. 

Revenues rose 10.2% year over year to $532.6 million, driven by higher sales volumes, favorable foreign currency translation and improved selling price and product mix. Sales surpassed the consensus estimate of $511.8 million. 

 
Sales volumes increased 7% year over year, primarily reflecting new business wins across all segments. Adjusted EBITDA advanced 12.8% to a record $85.2 million, supported by higher sales, partly offset by increased SG&A expenses. 
 
Consolidated sales growth included a 7% contribution from volumes, a 2% favorable currency impact and a 1% benefit from selling price and product mix. Underlying end-market activity was similar to the prior-year period, while new business wins drove share gains across all regions. 

Quaker Houghton Price, Consensus and EPS Surprise

Quaker Houghton price-consensus-eps-surprise-chart | Quaker Houghton Quote

Segment Performance

Americas revenues increased 7% year over year to $236.5 million, above the consensus estimate of $232.9 million. The improvement reflected 4% higher sales volumes, a 1% benefit from selling price and product mix and a 2% favorable currency impact. Segment operating earnings declined to $57.2 million from $59 million due to higher raw material costs and SG&A expenses. 

 
EMEA sales rose 13% year over year to $158.4 million, topping the consensus estimate of $147 million. Sales volumes increased 7%, selling price and product mix added 4% and foreign currency translation contributed 2%. Segment operating earnings climbed to $32.7 million from $25 million on higher sales and improved margins. 
 
Asia/Pacific revenues increased 12% year over year to $137.6 million, exceeding the consensus estimate of $130.8 million. Sales volumes advanced 10%, while pricing and currency each added 1%. Segment operating earnings rose to $36.6 million from $28.7 million, driven by stronger sales despite some margin pressure. 

Balance Sheet and Cash Flow

Cash and cash equivalents were $155.1 million at the end of the second quarter compared with $179.8 million at the end of 2025. Total gross debt was $876.1 million, resulting in net debt of approximately $721 million. 
 
Net cash provided by operating activities was $33.2 million for the first six months of 2026 compared with $38.5 million in the prior-year period. The decline reflected higher working-capital outflows, partly offset by improved operating performance and lower restructuring-related cash outflows. 
 
The company invested $21 million in property, plant and equipment during the first half of 2026. In the second quarter, it repurchased approximately $24.2 million of shares and announced a new $250 million stock repurchase program. 
 
Net leverage remained approximately 2.3x trailing 12-month adjusted EBITDA. The company also increased its quarterly dividend by roughly 4.3%. 

Outlook

Management expects stable demand entering the third quarter, with end markets projected to remain flat to slightly positive through the rest of 2026. Continued share gains are expected to support volume growth despite macroeconomic and geopolitical uncertainty. 
 
Quaker expects the gross margin percentage in the third quarter to remain near second-quarter levels as it works through raw material cost inflation, inventory movements and the timing of price recovery actions. Management said pricing and cost initiatives should allow the company to exit 2026 within its target gross margin range. 
 
The company continues to expect meaningful revenue and adjusted EBITDA growth in 2026, supported by new business wins, disciplined cost management and the resilience of its global network. 
 
Management remains focused on operational execution and shareholder returns while navigating raw material inflation and market volatility. 

KWR’s Price Performance

KWR shares have gained 37.1% in the past year compared with the industry's 5.6% rise.

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KWR’s Zacks Rank & Other Key Picks

KWR currently carries a Zacks Rank #2 (Buy). 

Other top-ranked stocks in the Basic Materials space include Almonty Industries Inc. ALM, Neo Performance Materials Inc. NOPMF and Skeena Resources Limited SKE.

Almonty is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for ALM’s second-quarter earnings is pegged at 10 cents per share. It carries a Zacks Rank #2 at present.

NOPMF is slated to report second-quarter results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at 50 cents per share. NOPMF has a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Skeena Resources is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for SKE’s second-quarter loss is pegged at 11 cents per share. It currently carries a Zacks Rank #2.

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This article originally published on Zacks Investment Research (zacks.com).

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