WORLD KINECT CORP (WKC)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered adjusted EPS of $0.62, up 15% YoY, with gross profit of $259M near the top of prior guidance, while GAAP EPS was a loss of $(1.77) driven by one-time Brazil divestiture and impairments; consolidated revenue was $9.76B, down 19% YoY .
• Aviation volumes rose 4% YoY with strength in Europe/Asia; land adjusted gross profit was flat YoY; marine gross profit fell 22% on softer bunker prices/volatility .
• Free cash flow for FY 2024 was $192M; Q4 operating cash flow was $120M and share buybacks were $43M; management returned $139M to shareholders in 2024 and raised the dividend 21% .
• 2025 setup: Q1 2025 GP guidance $234–$241M; adjusted opex $179–$184M; interest expense $22–$23M; tax rate expected to normalize to 22%–25% for FY 2025, implying near-term margin pressure offset by opex discipline and portfolio simplification — a potential stock catalyst if execution sustains opex declines and land margin expansion continues .

What Went Well and What Went Wrong

• What Went Well

  • Aviation momentum: “Our aviation business delivered impressive results in the fourth quarter…commercial resale and business and general aviation” with 1.8B gallons, +4% YoY; Europe/Asia led growth .
  • Operating expense discipline: Adjusted opex fell 5% YoY to $197M in Q4; FY 2025 adjusted opex expected to decline again y/y, supporting margin goals .
  • Cash returns and buybacks: $102M free cash flow in Q4; $100M buybacks in FY 2024 and dividend up 21%, evidencing confidence in cash generation .

• What Went Wrong

  • GAAP loss from non-GAAP adjustments: $(1.77) GAAP EPS in Q4 due to Brazil sale charge (~$111M pre-tax, $80M CTA) plus ~$31M other impairments/exits; adjusted EPS was $0.62 .
  • Marine profitability headwinds: Q4 marine GP down 22% YoY on lower bunker prices and reduced market volatility; margins are highly dependent on price volatility .
  • Land sustainability/nat gas softness: Lower profit contribution from sustainability offerings and Brazil/U.K. conditions; land adjusted GP flat YoY in Q4 despite improvement late in year .

Financial Results

Segment Gross Profit ($USD Millions)

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are making good progress towards our medium-term financial targets…strong cash flow generation…repurchase $100 million of shares during the year…our aviation business delivered impressive results…land segment delivered solid results…standardizing our North American liquid land operations onto a unified technology and operating platform” — Michael J. Kasbar .
• “There were several non-GAAP adjustments…totaled $143 million…one-time noncash pretax charge of approximately $111 million [Brazil sale]…approximately $9 million [North American land exit]…approximately $22 million [impairment of minority equity investment]” — Ira Birns .
• “Adjusted consolidated operating expenses were $197 million in the fourth quarter…For the first quarter…$179 million to $184 million…Full year '25…another year-over-year decline” — Ira Birns .
• “We generated operating cash flow of $120 million and free cash flow of $102 million [Q4]…For the full year…$260 million operating cash flow and $192 million free cash flow…returned approximately $139 million to shareholders…increased our dividend by 21%” — Ira Birns .

Q&A Highlights

• Land portfolio actions: Brazil was small/volatile and loss-making; U.S. heating oil exit restructurings flip losses to profits; 1–2 further cost-out opportunities remain; focus on U.S. gasoline/diesel and largest cardlock network .
• Marine margins: Highly dependent on volatility; pricing softened; margins down vs last year; YoY comps should normalize by 2Q–3Q .
• Aviation drivers: Volume growth tied to commercial passenger demand, especially Europe/Asia; Avinode exit dampens YoY GP in 1Q .
• Capital returns: 72% of 3-year FCF returned (~$312M); 2024 payout high due to strong cash flow and fewer acquisitions; longer-term target ~40% but opportunistic .
• Land 1Q improvement: Expected in cardlock/retail North America and some nat gas improvement; Brazil exit immaterial at GP line .

Estimates Context

• Wall Street consensus (S&P Global Capital IQ): Unable to retrieve Q4 2024 estimates due to data access limits at this time; therefore, beats/misses versus consensus cannot be assessed. Values would be retrieved from S&P Global when available.*

Key Takeaways for Investors

• Execution on portfolio simplification is real: Brazil exit and NA land restructuring materially reduce noise and improve run-rate margins; further steps likely in 2025 .
• Near-term economics: Q1 2025 guide implies sequential GP down vs Q4, but opex and interest guidance are lower; tax rate normalizes higher, tempering EPS optics .
• Aviation remains the anchor: Core commercial and B&GA demand plus tuck-in integration support stable GP; watch seasonal dip and Avinode sale headwind in 1Q .
• Marine leverage resumes as comps ease: Expect stabilization as 2Q–3Q year-over-year volatility/pricing comps normalize; upside if macro volatility rises .
• Cash returns are a support: Strong FCF and disciplined opex enable continued buybacks/dividends even as M&A pipeline revives; capital allocation flexibility remains high .
• Medium-term thesis: Unified land platform (Flyers) and focus on U.S. cardlock/retail should structurally raise land margins; achieving the 30% land operating margin target is the primary earnings power swing factor by 2026 .
• Watch items: Sustainability/SAF growth trajectory, nat gas market dynamics (including AI/data center demand), and any incremental exits/M&A that accelerate operating leverage .

S&P Global disclaimer: Values would be retrieved from S&P Global when available.