Orion to Shut Carbon Black Line, Streamlines Investments

Orion S.A. OEC has announced its plans to rationalize its carbon black production lines at three to five of its facilities in the Americas and EMEA by the end of 2025. This decision has been made to refocus its maintenance investments on higher-performing production lines.

Earlier this year, Orion entered into a long-term supply pact with Contec S.A., which would provide it with tire pyrolysis oil (“TPO”) to produce circular carbon black for tires and rubber goods. This way, Orion has established itself as the only company to have made circular carbon black from 100% TPO as a feedstock.

With an expectation of more reliable, streamlined and productive investments, the closure will discontinue Orion’s participation in underperforming assets. The transaction, paired with U.S. tariffs, the EU anti-dumping investigation and continued tire capacity investment in both regions, intends to help the company regain its market share.

For the second quarter, the company expects adjusted EBITDA between $270 million and $310 million. Adjusted EPS is expected to fall within the range of $1.20 to $1.70.

The Zacks Consensus Estimate for OEC’s 2025 earnings is at $1.33, suggesting a year-over-year decline of 24%.

Free cash flow guidance for the year is at $40 million to $70 million.

OEC stock has slumped 47.1% over the past year against the industry’s 3.4% rise.

OEC’s Zacks Rank & Key Picks

OEC currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Basic Materials space are Royal Gold RGLD, Coeur Mining CDE and Carpenter Technology CRS. While RGLD and CDE currently sport a Zacks Rank #1 (Strong Buy), CRS carries a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RGLD’s current-year earnings is pegged at $7.47 per share, indicating a 42.02% year-over-year increase.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 9.04%. RGLD’s shares have gained 21.8% in the past year.

The Zacks Consensus Estimate for CDE’s current-year earnings is pegged at 68 cents per share, implying a 277.78% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing once, with an average surprise of 136.19%.

The Zacks Consensus Estimate for CRS’ 2025 earnings is pegged at $7.27 per share, indicating a rise of 53.38% from year-ago levels. The company’s earnings beat the consensus estimate in each of the trailing four quarters. Its shares have gained 154.9% in the past year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research