SunCoke Energy (NYSE:SXC) reported first-quarter 2026 results that management said reflected “strong operational execution,” despite weather-related disruptions at its coke plants and a turbine issue that reduced power sales at its Middletown facility.
First-quarter performance and factors affecting results
President and CEO Katherine Gates said the company delivered consolidated Adjusted EBITDA of $56.5 million in the quarter and generated operating cash flow of $72.7 million. “We’re pleased with our performance in the first quarter,” Gates said, while noting that coke operations were impacted by “severe winter weather and the Middletown turbine failure,” which had previously been discussed on the company’s fourth-quarter 2025 call.
Adjusted EBITDA declined year over year to $56.5 million from $59.8 million. Agrawal said the decrease was “primarily driven by the impact of severe winter weather on our coke operations, lower power sales from the Middletown turbine failure, and the shutdown of Haverhill One,” with those factors “mostly offset by the addition of Phoenix.”
Domestic coke: weather and turbine disruption, improvement expected
In the domestic coke segment, SunCoke posted first-quarter Adjusted EBITDA of $35.3 million with coke sales volumes of 842,000 tons, compared with $49.9 million and 898,000 tons in the prior-year period. Agrawal said the decline was driven by severe winter weather, lower power sales linked to the Middletown turbine failure, and lower volume resulting from the Haverhill One shutdown.
Management said conditions improved entering the second quarter. “While we experienced a slow start to the year, we are already seeing improvement in our coke operations in the second quarter with more favorable weather conditions,” Agrawal said. He added that the company expects to “make up the lost production from the first quarter during the balance of the year,” and that power production at Middletown is expected to resume late in the second quarter.
During the Q&A session, Benchmark Company analyst Nathan Martin asked about domestic coke segment profitability per ton relative to full-year expectations. Agrawal reiterated that the “two main factors” weighing on results were “the winter weather impact to our operations and the Middletown turbine impact,” adding that the quarter was “roughly $10 million off versus kind of the run rate,” consistent with the company’s prior commentary. He said the Middletown turbine is expected to return late in the second quarter, with the impact continuing through “majority of Q2” due to no power production. Agrawal said the company expects to “make that back up in Q3 and Q4” as power production returns.
Asked whether the second-quarter turbine impact could be roughly half of that $10 million headwind, Agrawal responded, “That’s kind of in the ballpark, yes.”
SunCoke reaffirmed full-year domestic coke Adjusted EBITDA guidance of $162 million to $168 million.
Industrial services: Phoenix contribution and stronger terminal volumes
SunCoke’s industrial services segment generated first-quarter Adjusted EBITDA of $26.2 million, up from $13.7 million in the prior-year period. Agrawal said the increase was “primarily driven by the addition of Phoenix results,” partially offset by a change in the mix of products handled at terminals.
Total terminal handling volumes were 5.6 million tons in the first quarter, which Agrawal described as a “substantial improvement versus the fourth quarter of 2025.” The company also reported steel customer volumes serviced of 5.6 million tons in the quarter.
In response to a question about industrial services profitability trends, Agrawal said the company is seeing “significant improvement in the volumes that we are handling in terminals,” and that SunCoke expects the market environment to “continue and to continue to improve for the rest of the year.” He also pointed to continued integration work at Phoenix, calling the first quarter the company’s “second full quarter of running Phoenix under the SunCoke umbrella.” Agrawal said some integration efforts, such as software implementation and merging operations, carry “drag cost,” but he expects “some cost improvement in Phoenix” through the rest of 2026 that is “built in to our guidance for industrial segment.”
SunCoke reaffirmed its full-year 2026 industrial services Adjusted EBITDA guidance of $90 million to $100 million.
Cash flow, liquidity, leverage goals, and dividend
Agrawal said SunCoke ended the first quarter with $104.4 million in cash and $158 million of revolver availability, for total liquidity of $262 million. Operating cash flow of $72.7 million was “mainly driven by a reduction in coal and coke inventory,” according to Agrawal.
During the quarter, the company used $26 million for debt paydown, spent $17 million on capital expenditures, and paid $10.7 million in dividends at a quarterly rate of $0.12 per share.
Gates said SunCoke announced a quarterly dividend of $0.12 per share payable June 2, 2026, marking the company’s “27th consecutive quarter announcing a dividend.” While the dividend is evaluated quarterly by the board, Gates said the company expects it to continue as part of a “well-balanced capital allocation strategy.”
Gates also outlined a leverage objective, saying the company intends to use excess cash to continue paying down its revolver balance “with the goal of gross leverage below three times by the end of 2026 and beyond.”
Outlook: sold out for 2026, guidance reaffirmed
Management said SunCoke is operating at full capacity and “sold out for the full year,” according to Gates. In her closing remarks, Gates highlighted the company’s long-term coke business as being underpinned by “the three pillars of Indiana Harbor, Middletown, and Jewell Foundry,” and said Haverhill Two and Granite City cokemaking contracts have been extended and “all spot blast and foundry coke sales finalized.”
For industrial services, Gates said 2026 would benefit from “a full year of Phoenix Adjusted EBITDA contribution and improvement in market conditions at our terminals,” while the company continues to focus on “seamless integration of Phoenix” and evaluating “new growth opportunities across all of our businesses.”
SunCoke reaffirmed its full-year consolidated Adjusted EBITDA guidance of $230 million to $250 million. Gates said that with Phoenix integration progressing, expected resumption of Middletown power production, and continued operational execution, the company is confident it will achieve full-year results within that range.
In Q&A, Gates addressed questions about market conditions at the company’s terminals. She said SunCoke’s terminal guidance is primarily based on market conditions and that throughput has historically been driven by “demand primarily internationally for coal,” rather than regulatory initiatives. She also said the company is seeing “some higher pricing in the market,” which is contributing to higher demand and supporting management’s view that markets are strengthening as the year progresses.
About SunCoke Energy (NYSE:SXC)
SunCoke Energy, Inc is a leading independent producer of metallurgical coke and related products for the steel and foundry industries. The company specializes in manufacturing both blast furnace coke and foundry coke, offering high‐quality, low‐sulfur coal products that serve as essential inputs in steelmaking and metal casting processes. In addition to coke production, SunCoke provides comprehensive engineering, maintenance and environmental solutions tailored to the needs of integrated steel mills and foundries.
The company operates a network of coke production facilities across the United States, including plants in Indiana, Ohio, West Virginia and Louisiana.
