Why Calumet Stock Flopped on Friday
Key Points
On a brighter note, its sales rose considerably.
Investors weren't in the mood to accentuate the positive, however.
Friday was a trading day to forget for Calumet (NASDAQ: CLMT) and its shareholders. The oil products company's stock fell by almost 6% due largely to a quarterly earnings report that featured a surprise net loss.
A big revenue gain, but...
Calumet's second quarter saw the company earn just under $1.45 billion, nearly 41% higher year over year. Net loss under generally accepted accounting principles (non-GAAP, or adjusted) narrowed considerably, coming in at $95.9 million ($1.09 per share) from the year-ago deficit of $147.9 million.
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At first glance, those improvements looked encouraging, but analysts tracking the stock were expecting a net profit, not a loss. Their consensus for this was $0.17 per share. At least the company beat convincingly on the top line, as those pundits were collectively modeling a $1.11 billion result.
On an operational basis, Calumet did rather well, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising to $206 million from the second quarter 2025's $123 million. Adjusted EBITDA rose in two of the company's three reporting segments.
The unexpected net loss was due to items such as accounting and operating costs deriving from its renewable identification numbers (RINs; a federal government regulatory tracking system), fuel hedging, and debt servicing.
Fundamental concerns
No investor likes a surprise net loss, and Calumet was punished for this transgression. Its business is actually in better shape than the market's reaction would indicate. Still, the company's mountain of long-term debt (over $2.2 billion at the end of the quarter) remains a significant concern and is sure to continue affecting the financials.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.