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Huntsman CORP (HUN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 results missed on both revenue and EPS vs consensus: revenue $1.458B vs $1.497B estimate, and adjusted diluted EPS -$0.20 vs -$0.12 estimate; GAAP diluted EPS was -$0.92 driven by $124M restructuring/impairment and plant closing costs . Estimates marked with an asterisk below; Values retrieved from S&P Global.*
  • Segment pressure persisted: Polyurethanes EBITDA fell 61% YoY, Performance Products -30%, Advanced Materials -13% YoY; volumes and pricing were weak, with muted seasonal uplift and a Rotterdam turnaround headwind .
  • Management reiterated cost actions (workforce reduction ~10%, multiple site closures) and cash discipline; free cash flow improved to $55M vs $5M YoY; liquidity stood at ~$1.3B .
  • 3Q25 outlook: adjusted EBITDA guidance ~$55–$85M total (PU $35–50M, PP $20–30M, AM $40–45M; Corporate ~-$40M); capex expected $180–$190M for 2025 at the lower end; dividend maintained at $0.25 per share for Q3 .

What Went Well and What Went Wrong

  • What Went Well

    • Free cash flow improved materially: $55M in Q2 vs $5M YoY, supported by working capital actions ($100M primary working capital delta) .
    • Advanced Materials delivered more “normalized” earnings; solid demand in power helped offset aerospace headwinds; margins at ~17% with Q3 guidance $40–45M .
    • Inventory and cash management actions generated positive cash flow; management emphasized balance sheet protection and cost discipline .

  • What Went Wrong

    • Pricing and volume pressure: Polyurethanes ASP down ~5% YoY and volumes down ~2%; muted construction seasonality and competitive pressure in Europe .
    • Large restructuring/impairment and plant closing costs ($124M) drove GAAP operating loss (-$120M) and diluted loss per share (-$0.92) .
    • Equity loss from the China MTBE JV and Rotterdam turnaround weighed on results; CEO cited inventory reductions costing ~$25M of EBITDA in Q2 .

Financial Results

Actuals by period (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.452 $1.410 $1.458
Gross Profit ($USD Millions)$188 $201 $182
Gross Margin (%)12.9% (188/1,452) 14.3% (201/1,410) 12.5% (182/1,458)
Operating Income ($USD Millions)-$63 $42 -$120
Adjusted EBITDA ($USD Millions)$71 $72 $74
Diluted EPS (GAAP)-$0.82 -$0.03 -$0.92
Adjusted Diluted EPS-$0.25 -$0.11 -$0.20

Q2 actual vs consensus (S&P Global)

MetricConsensus Q2 2025*Actual Q2 2025Surprise
Revenue ($USD Billions)$1.497*$1.458 -$0.039B (~-2.6%)
Primary EPS (Adjusted)-$0.12*-$0.20 -$0.08

Segment breakdown

SegmentRevenue Q2 2024 ($MM)Revenue Q2 2025 ($MM)YoYAdj. EBITDA Q2 2024 ($MM)Adj. EBITDA Q2 2025 ($MM)YoY
Polyurethanes$1,001 $932 -7% $80 $31 -61%
Performance Products$299 $270 -10% $46 $32 -30%
Advanced Materials$279 $264 -5% $52 $45 -13%
Total Reportable Segments$1,579 $1,466 -7% ———
Total Revenues$1,574 $1,458 -7% Adjusted EBITDA Total: $131 $74 -43%

KPIs

KPIQ2 2024Q1 2025Q2 2025
Net Cash from Operations ($MM)$55 -$71 $92
Free Cash Flow ($MM)$5 -$107 $55
Capex ($MM)$50 $36 $37
Liquidity ($B)~$1.334 ~$1.3 (as of Mar-31) ~$1.3 (as of Jun-30)
Net Debt ($B)$1.585 $1.620 $1.636

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA – PolyurethanesQ3 2025N/A$35–$50M New detail
Adjusted EBITDA – Performance ProductsQ3 2025N/A$20–$30M New detail
Adjusted EBITDA – Advanced MaterialsQ3 2025N/A$40–$45M New detail
Corporate & OtherFY 2025~$150M ~$150M Maintained
Cost Savings Program BenefitFY 2025N/A~$65M New detail
D&AFY 2025N/A~$290M New detail
Interest Expense YoYFY 2025N/A~+$10M headwind New detail
CapexFY 2025$180–$190M Lower end of $180–$190M Lower within range
Dividend per shareQ3 2025N/A$0.25 declared, payable Sep 30 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macro volatilityQ1: “Liberation Day” tariff shock, uncertainty driving bullwhip effect; inventory lean; MDI imports into US down sharply; antidumping path outlined Q2: Volatility “starting to dissipate,” but order books “stable”; uncertainty remains; higher tariffs/duties for MDI a watch-point Stabilizing directionally, still uncertain
European competitivenessQ4: Europe compromised by energy costs/regulation; restructuring and site closures planned Q2: Sequential competitive pressure in Europe; pricing discipline lacking; continued restructuring/site closures Ongoing pressure; continued rightsizing
MDI pricing/utilizationQ1: ASP volatility; pass-through mechanics; US margin expansion depends on price/raws; utilization impacted by imports Q2: Industry running low–mid 80% utilization; Europe ~80%; China stabilization; polymeric MDI prices in China recovered vs early Q2 Utilization stable; pricing stabilizing in China
MTBE JV equity incomeQ1: MTBE margins near breakeven; dividend headwind vs 2024 Q2: Equity loss cited; unlikely to improve materially in H2 Persistent headwind
Advanced MaterialsQ4: Stable; Q1: solid end-markets, but volatility Q2: More normalized earnings; power strength; aerospace rebuild lag noted; Q3 EBITDA $40–45M Normalizing; modest improvement expected
Dividend policyQ1: Board views dividend as “sacred”; liquidity $1.3B; maturities 2029/31/34 Q2: Maintained; Board reassessing quarterly; comfort with balance sheet; declared $0.25 Maintained amid trough

Management Commentary

  • “Lower global construction and industrial activity pressured our volumes… seasonal uplift in construction demand… was muted in 2025… restructuring… will ultimately reduce our global workforce by nearly 10%… generated positive cash flow… protecting the balance sheet remains a priority” — Peter R. Huntsman .
  • “We will operate our business to create value over volume… possible influences of higher tariffs and duties for MDI… interest rate cut… more cost reductions falling to the bottom line” — Peter R. Huntsman .
  • On Europe pricing: “People are putting volume over value… Europe is today our highest cost urethane production in the world and our lowest value of MDI in the world” — Peter R. Huntsman .

Q&A Highlights

  • MDI utilization: industry low–mid 80%; North America slightly higher; Europe ~80% .
  • Order books: “stable” with thin supply chains; just-in-time ordering suggests low inventories; no clear pickup yet .
  • Dividend stance: comfortable for now; Board reassesses quarterly; balance sheet and cash generation prioritized .
  • Trade/tariffs: desire for “finality”; volatility harms downstream customers; Huntsman largely regional in sourcing; impacts felt more downstream (auto/construction) .
  • Unusual trade flows: increased European MDI imports into US despite higher costs; management baffled; indicates market dislocations .
  • Turnarounds/one-offs: Rotterdam turnaround and inventory reductions weighed on Q2; inventory actions cost ~$25M EBITDA (offset by bonus accrual releases) .

Estimates Context

  • Q2 2025 actuals missed S&P Global consensus: revenue $1.458B vs $1.497B estimate; adjusted EPS -$0.20 vs -$0.12 estimate; counts: EPS 14, Revenue 11. Free cash flow and liquidity robust, but profitability pressured by restructuring and segment margin compression . Values retrieved from S&P Global.*
  • Street likely to adjust near-term EBITDA/segment margin assumptions lower, particularly for Polyurethanes and Performance Products, and reflect continued MTBE JV headwind and European competitive dynamics .

Key Takeaways for Investors

  • Near-term setup remains challenged: muted construction seasonality, competitive pricing in Europe, and MTBE JV headwind; watch Q3 segment EBITDA ranges ($55–$85M total) for trajectory confirmation .
  • Cost actions are meaningful: ~$100M run-rate benefits targeted by end-2026; workforce reduction and site closures should support margins when demand normalizes .
  • Cash discipline effective: Q2 free cash flow improved to $55M; liquidity ~$1.3B and staggered bond maturities (2029/31/34) underpin dividend durability in trough conditions .
  • Tariff dynamics could support North American MDI margins longer term; expect pricing/mix improvements if volumes recover and antidumping measures persist .
  • Advanced Materials is stabilizing; power strength and aerospace normalization over coming quarters can offset cyclical weakness elsewhere .
  • Monitor European rationalization and pricing behavior; management continuing to rightsize footprint to counter structurally higher costs .
  • Watch macro catalysts: interest rate path, construction demand recovery, and trade policy clarity—each could drive inventory rebuilds and margin recapture per management commentary .

Footnote on estimates: Values marked with an asterisk (*) are retrieved from S&P Global.