EAF earnings analysis
What we found in EAF's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
GrafTech delivered Q2 net sales of $127.362 million and a GAAP loss per share of $1.54, with revenue up sequentially but down 3% year over year as an 8% volume increase was more than offset by a 7% pricing decline. Operating performance improved meaningfully from Q1, including a 74% utilization rate and operating margin of negative 11.4%, but gross profit remained slightly negative at a $0.422 million loss. The principal offset is liquidity: Q2 free cash flow was negative $75.476 million and total debt reached approximately $1.2 billion, although management maintained its 5%-10% 2026 volume-growth and approximately $35 million capex outlook.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Sequential revenue improved despite lower pricing
- Q2 revenue was $127.362 million, up 1.9% sequentially from $125 million in Q1 2026, though down 3% year over year from $131.840 million. The sequential increase was driven by volume, while realized price fell 7% year over year to approximately $3,900 per MT.
- Volume and utilization strengthened
- Sales volume rose 8% year over year to 30.8 thousand MT and production increased to 33.4 thousand MT. Capacity utilization improved 9 percentage points to 74% from 65%, while U.S. sales volume rose 29%.
- Margins improved materially versus Q1
- Gross loss narrowed sequentially: gross margin improved to negative 0.3% in Q2 from negative 7.8% in Q1, and operating margin improved to negative 11.4% from negative 24.5%. Cash COGS per MT declined 6% year over year to $3,517.
- GAAP loss narrowed sharply year over year
- GAAP diluted loss per share was $1.54, improving from a $1.66 loss in Q1 and a $3.35 loss in Q2 2025. Net loss narrowed to $40.471 million from $86.886 million a year earlier, principally because prior-year tax expense was $51.207 million versus $1.703 million this quarter.
- New commitments indicate pricing recovery
- Management said new commitments secured after its announced price increases carry weighted-average prices more than 15% above comparable commitments entered into in Q1 2026. More than 90% of anticipated 2026 volume is already committed in the order book.
- Term-loan draw increased cash balance
- The company drew the remaining $100.0 million delayed-draw first-lien facility in Q2. Cash was $145.4 million at June 30, 2026, up from $138.4 million at December 31, 2025.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Quarterly cash burn accelerated
- Free cash flow was negative $75.476 million in Q2, versus negative $57.145 million in Q2 2025, as operating cash outflow was $68.612 million and capital expenditures were $6.864 million. Q2 capex equaled 5.4% of $127.362 million revenue.
- Leverage remains elevated after facility draw
- Total debt rose to approximately $1.2 billion at June 30, 2026 from $1.1 billion at December 31, 2025 after the $100.0 million delayed-draw borrowing. Liquidity declined to $253.0 million from $340.0 million because the delayed-draw availability was exhausted.
- Pricing pressure still prevents gross profit
- Realized price declined 7% year over year to approximately $3,900 per MT amid persistent competitive pressure, producing a $0.422 million gross loss. The company is seeking $600-$1,200 per-MT increases on uncommitted volume, but realization remains uncertain.
- No formal risk-factor update; liquidity access constrained
- The filing reports no material changes to Item 1A risk factors versus the February 13, 2026 10-K. However, revolver availability was only $107.6 million against $225.0 million of commitments because operating performance restricted access to the full facility.
- Higher volume requires additional working capital
- Working-capital demands remain a headwind: cash provided by receivables decreased $9.7 million in the first six months of 2026 due to higher sales volume. Management still expects a modest full-year working-capital increase and reported $19.0 million of first-half capex against a $35.0 million full-year plan.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-1.54
- Gross margin
- -0.3%
- Operating margin
- -11.4%
- Segment
- Grafite electrodes / consolidated business: net sales were $127.362 million; the filing does not disclose separate reportable-segment revenue. Sales volume was 30.8 thousand MT, up 8% year over year from 28.6 thousand MT.
What they said about what is next.
Management maintained expectations for 2026 graphite-electrode sales-volume growth of 5%-10%, a low-single-digit percentage-point decline in cash COGS per MT, a modest full-year working-capital increase, and approximately $35 million of capital expenditures. No revenue or EPS guidance was provided in the 10-Q.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 1, 2026
- GrafTech International Ltd. reported Q1 2026 earnings with a net revenue of $125.1 million, a 12% increase year-over-year, but it faced a net loss of $43.3 million, resulting in a loss per share of $1.66. This revenue…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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