GrafTech Shares Gain On Q4 Earnings Beat

  • GrafTech International Ltd EAF reported fourth-quarter sales growth of 7.5% year-over-year to $363.29 million, beating the consensus of $356 million.
  • Adjusted EPS improved to $0.50 from $0.43 in 4Q20, beating the consensus of $0.42.
  • Sales volume increased 19% Y/Y. Production volume increased 28% Y/Y.
  • The gross margin contracted 224 bps to 49.7%. The operating profit increased to $162.04 million (+4.1% Y/Y), and the margin contracted by 146 bps to 44.6%.
  • Adjusted EBITDA increased by 4.2% Y/Y to $182.82 million, and margin contracted by 161 bps to 50.3%.
  • GrafTech generated cash from operating activities for FY21 of $443 million, compared to $563.65 million a year ago, and adjusted Free cash flow of $456.16 million.
  • As of December 31, 2021, GrafTech had cash and equivalents of $58 million and total debt of ~$1 billion.
  • "Market trends continued to improve in the fourth quarter of 2021 and we expect these positive trends to continue into 2022. Our average non-LTA graphite electrode price increased 10% sequentially from the third quarter of 2021. We expect our first quarter average non-LTA prices to increase an additional 17-20% over the fourth quarter," said CEO David Rintoul.
  • GrafTech expects cost increases in 2022, driven by recent global inflationary pressures. 
  • Price Action: EAF shares are trading higher by 6.93% at $12.04 during the premarket session on Friday.
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