AdvanSix Q2 Earnings Call Highlights

AdvanSix (NYSE:ASIX) reported second-quarter 2026 sales of $421 million, up approximately 3% from a year earlier, as higher pricing offset lower volumes across its portfolio. Adjusted EBITDA was $32 million, down $24 million year over year, while adjusted earnings per share declined $1.05 to $0.19.

President and CEO Erin Kane said the company delivered sequential improvements in earnings and cash flow despite a dynamic market backdrop, particularly in Plant Nutrients. Management said its commercial pricing actions fully offset higher costs for sulfur, benzene and propylene during the quarter, bringing the year-over-year net pricing-over-raw-material impact to neutral after a first-quarter headwind.

Pricing Offset Input Inflation, but Fertilizer Volumes Fell

Senior Vice President and CFO Patrick Day said sales growth reflected 18% favorable pricing, partially offset by a 15% volume decline. Raw-material pass-through pricing rose 13% following increased benzene and propylene costs, while market-based pricing increased 5%, primarily due to higher Plant Nutrients pricing amid elevated nitrogen and sulfur costs.

Raw material costs represented a $72 million year-over-year headwind in the second quarter, driven mainly by benzene and sulfur prices, according to Day. AdvanSix said it fully recovered that cost increase through pricing actions across its businesses. On a sequential basis, the company said the net impact from pricing over raw materials swung from a $10 million headwind in the first quarter to a $39 million tailwind in the second quarter.

Lower Plant Nutrients sales volumes accounted for much of the decline in volume. Kane said farmers faced higher input costs while crop and grain prices remained at relatively low levels, pressuring grower profitability and reducing fertilizer consumption. Ammonium sulfate demand weakened in the second quarter after strong early-season purchases, as growers prioritized nitrogen applications, particularly ammonia, during the peak planting season.

Despite softer in-season demand, AdvanSix said it completed the fertilizer year with near-record domestic granular ammonium sulfate volumes. The company attributed part of that performance to higher production output and mix improvements from its SUSTAIN growth program.

Operational and Portfolio Developments

AdvanSix said volume effects reduced second-quarter adjusted EBITDA by $17 million year over year, while the timing of planned plant turnarounds created an approximately $4 million operational headwind. The company moved its ammonia turnaround into the second quarter to align with a supplier’s natural-gas pipeline inspection and said the work was completed as expected.

Kane told analysts that Hopewell utilization was in the mid-70% range during the quarter, consistent with other turnaround periods. The company is evaluating production and sales decisions across its integrated network, including opportunities to sell more ammonia and sulfuric acid depending on market economics.

AdvanSix sold approximately 49,000 short tons of ammonia in the first half, compared with 33,000 short tons in the first half of 2025. Management expects full-year ammonia sales volumes to increase 30% from 2025, which had been a record year, reflecting debottlenecking efforts and targeted maintenance investments.

Within Nylon Solutions, resin volumes rose year over year on improved operations, while caprolactam volumes moderated because of soft demand in carpet applications. Chemical Intermediates demand across construction, coatings and industrial markets was broadly stable, management said. The company also cited soft phenol demand, reduced global operating rates and lower acetone imports into the U.S. as factors tightening acetone market conditions.

Sulfur Costs and Second-Half Outlook

Sulfur costs reached record levels during the past year, with Kane citing the Middle East conflict as an amplifier of elevated pricing. The Tampa sulfur marker closed at $705 per long ton in the third quarter, after averaging $655 per long ton in the second quarter. AdvanSix said every $100-per-long-ton change in sulfur prices has an approximately $35 million annual cost impact on the company.

Management said third-party industry experts forecast a roughly $200-per-long-ton decline in sulfur prices entering 2027, which could benefit the next planting season. However, AdvanSix expects a greater-than-normal Plant Nutrients earnings headwind in the second half as the North American fertilizer year resets through the fall fill program.

Historically, the company has experienced a $10 million to $15 million sequential earnings headwind from Plant Nutrients during this period. This year’s effect is expected to be larger because high sulfur costs affected fall-fill pricing and fertilizer inventories remained in distribution channels, increasing competitive pressure as suppliers sought to liquidate inventory.

AdvanSix nevertheless expects second-half earnings and cash flow to improve sequentially from the first half. Management cited the absence of first-quarter winter storm effects, completion of the larger second-quarter turnaround, lower capital spending, working-capital benefits, annual payment timing and anticipated 45Q carbon-capture tax-credit receipts.

Capital Projects and Tax Credits

The company expects to receive an $18 million payment related to previously claimed 45Q credits in the second half, subject to resolution of an IRS audit. Day said AdvanSix’s 2018 life-cycle analysis is approved, while its 2021 analysis remains under review by the Department of Energy and IRS. The company maintained its longer-term targeted 45Q credit range of $100 million to $125 million.

AdvanSix also said its diesel exhaust fluid project remains in front-end engineering and design work, with a final investment decision targeted for the first half of 2027. If advanced, the project would begin operations in 2029. Separately, the company plans to apply for a USDA FIELDS grant to expand ammonia capacity and nitrogen availability for domestic farmers.

Kane said AdvanSix remains focused on commercial execution, operational reliability, cash generation and disciplined capital deployment as it seeks improved second-half performance and builds momentum into 2027.

About AdvanSix (NYSE:ASIX)

AdvanSix, Inc (NYSE: ASIX) is an integrated chemical manufacturer specializing in the production of nylon 6 intermediates and related co‐products. Established as a publicly traded spin‐off from Honeywell Specialty Chemicals in June 2016, the company is headquartered in Parsippany, New Jersey.

The company’s principal product is caprolactam, the key building block for nylon 6 resin, used in fibers and engineering plastics across industries. In addition to caprolactam and nylon 6 resin, AdvanSix produces ammonium sulfate fertilizer and industrial chemicals such as phenol and acetone.

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