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Huntsman CORP (HUN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was resilient on cash generation but weak on profitability: revenue $1.460B, adjusted EBITDA $94M, adjusted diluted EPS -$0.03; GAAP diluted EPS -$0.14 .
  • Versus Wall Street: revenue beat ($1.460B vs $1.444B*), and adjusted EPS beat (-$0.03 vs -$0.15*); Q2/Q1 were misses on revenue and adjusted EPS with improvement into Q3* .
  • Dividend reset by 65% to $0.0875/quarter ($0.35 annual) to preserve balance sheet flexibility during cyclical trough; Board anticipates raising when conditions warrant .
  • FY25 capex guidance trimmed to $170–$180M from $180–$190M previously; restructuring savings program likely to exceed $100M by 2026, with $40M incremental in 2026 .
  • Near-term catalysts: dividend reset and cash prioritization; potential industry pricing pressure amid European deindustrialization and inventory destocking commentary for Q4 .

What Went Well and What Went Wrong

What Went Well

  • Strong cash generation: operating cash flow $200M and free cash flow $157M in Q3, up from $93M YoY; combined cash and unused borrowing capacity ≈$1.4B .
  • Progress on cost actions: CEO reaffirmed restructuring savings program likely to exceed $100M by 2026; ~600 positions eliminated/relocated and seven site closures underway, mostly in Europe .
  • Advanced Materials resilience: revenue up YoY (+2%); management cited electronics and power as key growth areas over the next decade with electronics now ≈40% of AM earnings .

What Went Wrong

  • Pricing pressure: company-wide average selling price down 7% YoY across segments; Polyurethanes adjusted EBITDA down 37% YoY, Performance Products down 31% YoY .
  • Polyurethanes margin compression: lower MDI pricing and inventory reductions weighed on segment profitability despite volume improvement in Americas/Asia .
  • Europe headwinds: CEO highlighted deindustrialization and elevated energy/raw material costs; maleic anhydride prices in Europe depressed by Chinese imports and porous controls .

Financial Results

Consolidated Results vs Prior Quarters

Metric (USD Millions unless noted)Q1 2025Q2 2025Q3 2025
Revenues$1,410 $1,458 $1,460
Gross Profit$201 $182 $204
Adjusted EBITDA$72 $74 $94
Net (Loss) Attrib. to HUN$(5) $(158) $(25)
Diluted EPS (GAAP)$(0.03) $(0.92) $(0.14)
Adjusted Diluted EPS$(0.11) $(0.20) $(0.03)
Cash from Ops (Cont.)$(71) $92 $200
Free Cash Flow (Cont.)$(107) $55 $157

Year-over-Year (Q3 2025 vs Q3 2024)

MetricQ3 2024Q3 2025YoY
Revenues (USD Millions)$1,540 $1,460 -5%
Adjusted EBITDA (USD Millions)$131 $94 -28%
Diluted EPS (GAAP)$(0.19) $(0.14) Improvement
Adjusted Diluted EPS$0.10 $(0.03) Down
Gross Profit (USD Millions)$234 $204 -13%

Segment Breakdown (Revenue and Adjusted EBITDA)

SegmentQ1 2025 RevQ1 2025 Adj. EBITDAQ2 2025 RevQ2 2025 Adj. EBITDAQ3 2025 RevQ3 2025 Adj. EBITDA
Polyurethanes$912 $42 $932 $31 $956 $48
Performance Products$257 $30 $270 $32 $246 $29
Advanced Materials$249 $36 $264 $45 $265 $44
Total Reportable Segments$1,418 $108 $1,466 $108 $1,467 $121
Intersegment Eliminations$(8) —$(8) —$(7) —
Total Revenues$1,410 —$1,458 —$1,460 —

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Free Cash Flow (USD Millions)$(107) $55 $157
Net Debt (USD Millions)$1,620 $1,636 $1,540
Cash and Equivalents (USD Millions)$334 $399 $468
Capex (USD Millions)$36 $37 $43

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular DividendOngoing$0.25 per share quarterly ($1.00 annual) $0.0875 per share quarterly ($0.35 annual) Lowered 65%
Capital ExpendituresFY 2025$180–$190M $170–$180M Lowered
Restructuring SavingsThrough 2026Target ≈$100M (program announced) On track, likely to exceed $100M; incremental ≈$40M in 2026 Maintained/Improving
Tax Rate (Adj.)FY 2025Not providedNo quantitative guidance; Q3 adjusted ETR 40% (for context) N/A
Segment-SpecificFY 2025Not providedFocus on cash over EBITDA in Performance Products in Q4; expect destocking pressure Qualitative only

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Cash Prioritization & Working CapitalQ1: Low visibility; aggressive on costs/asset optimization . Q2: Positive cash flow; working capital actions boosted FCF .Emphasis on cash over EBITDA, $200M CFO, continued inventory reduction into Q4 .Strengthening cash focus
Europe DeindustrializationQ2: Moers closure; Europe cost headwinds .CEO: unprecedented challenges; site closures; relocating supply chains; avoid Europe’s uncompetitive costs .Worsening structural headwinds
MDI Market Dynamics & TariffsQ2: Price pressure; Rotterdam turnaround .Imports from Europe; China flows to Americas; operating rates ~low-80%; pricing stability best in U.S. .Mixed; modest stabilization U.S.
Advanced Materials End-MarketsQ1/Q2: AM down on coatings/aerospace; FX mix .Electronics ~40% of AM earnings; growth in power; auto/aerospace opportunities .Improving mix/growth drivers
Dividend Policy & Capital AllocationQ1/Q2: Protect balance sheet .Dividend reset to preserve flexibility; target increase when conditions improve .Defensive stance
Maleic Anhydride StrategyQ2: Moers closure; low-cost U.S. production .Europe pricing depressed by Chinese supply; U.S. tariff-protected and low cost; supply EU from U.S. .U.S.-centric strategy solidifies

Management Commentary

  • “Our current restructuring programs, that will likely exceed $100 million in savings, remain on track and are expected to be completed in 2026… our Board decided to reset the regular dividend to 35 cents a share annually, a reduction of 65%… We would anticipate returning to a higher dividend payout as soon as conditions warrant.” — Peter R. Huntsman, CEO .
  • “We delivered $200 million of operating cash this quarter… We will continue to prioritize cash over EBITDA, especially in our performance products division.” — CEO .
  • “We will continue to support our maleic customers in Europe, but we will do so from the U.S., where we can make maleic cheaper and deliver it at higher margins.” — CEO .
  • “Incremental savings next year… articulated at $40 million as we progress through the $100 million savings target.” — CFO .

Q&A Highlights

  • Inventory and utilization: Huntsman will sacrifice some Q4 EBITDA (esp. Performance Products) to finish 2025 with lean inventories, calibrating 2026 production to actual demand .
  • Dividend sizing: Board reduced dividend cash requirement to ≈$60M/year; supported by working capital actions (supply chain financing, extended supplier terms) to cover dividend while preserving flexibility .
  • Polyurethanes operating rates: Industry operating rates around low-80% across U.S., Europe, China; cost savings will help but normalized margins need price recovery and/or consolidation .
  • Feedstock tailwinds: U.S. benzene averaged $276/t in Q3, trading ≈$250/t; modest benefit with lag through cost of sales .
  • Advanced Materials content and growth: Electronics doubled over seven years; interior aerospace adhesives and automotive lightweighting/EV applications underpin medium-term growth .

Estimates Context

MetricQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 ActualQ3 2025 Estimate*Q3 2025 Actual
Revenue (USD)1,489,987,070*$1,410,000,000 1,496,709,070*$1,458,000,000 1,444,112,070*$1,460,000,000
Primary EPS (Adj.)-0.103*-0.11 -0.122*-0.20 -0.147*-0.03
EBITDA (USD)78,267,530*72,000,000 77,614,210*74,000,000 69,105,960*94,000,000
  • Q3: Revenue beat; Adjusted EPS beat; EBITDA beat versus SPGI consensus. Q2/Q1: Misses on revenue and adjusted EPS as cyclical weakness persisted*.
  • Note: SPGI “EBITDA” may not align perfectly with company “Adjusted EBITDA,” explaining occasional definitional differences*.
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Cash discipline is central: management is prioritizing free cash flow over EBITDA through Q4; expect lean inventories exiting 2025 and potential Q4 EBITDA sacrifice in Performance Products .
  • Dividend reset is a defensive move: $0.0875 quarterly (~$60M annual cash) preserves balance sheet; management intends to raise when fundamentals improve .
  • Polyurethanes remains the swing factor: pricing and demand recovery are needed for margin normalization; industry operating rates ~low-80% with potential consolidation catalysts in 2026 .
  • Advanced Materials offers relative resilience: electronics/power growth and aerospace content expansion are medium-term earnings drivers despite broader industrial softness .
  • Maleic strategy is U.S.-anchored: tariff protection and low-cost leadership support margins; Europe will be served from U.S. capacity given unfavorable EU economics .
  • Capex trimmed to $170–$180M and restructuring savings likely >$100M by 2026 (≈$40M incremental next year), underpinning improving cash profile into 2026 even if demand remains soft .
  • Near-term trading lens: dividend cut can weigh sentiment, but beats on revenue/EPS in Q3 and strong FCF may support on dips; watch Q4 destocking impact and any signs of pricing stabilization in U.S. MDI .