Minerals Technologies (MTX 10.98%), a specialty minerals and materials producer, reported its second-quarter 2025 financial results on July 24, 2025. The company posted a sequential improvement in earnings, surpassing analyst profit expectations (non-GAAP) but coming in just below revenue forecasts. Second-quarter non-GAAP earnings per share reached $1.55, beating the analyst estimate of $1.41 (non-GAAP). Revenue (GAAP), at $528.9 million, missed the consensus estimate by $1.57 million. While margins and cash flow improved from the previous quarter, the year-over-year revenue and earnings comparisons reflected mixed end-market demand. Overall, the quarter showed operational recovery and cost discipline, but persistent market softness kept growth below targeted levels.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.55 | $1.41 | $1.65 | (6.1%) |
| Revenue (GAAP) | $528.9 million | $530.47 million | $541.2 million | (2.3%) |
| Operating Income (Non-GAAP) | $79.0 million | $84.8 million | (6.8%) | |
| Adjusted EBITDA | $99.1 million | $107.7 million | (8.0%) | |
| Free Cash Flow | $33.8 million | $29.9 million | 13.1% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Recent Focus Areas
Minerals Technologies supplies specialty minerals, including products based on bentonite (a type of clay mineral) and precipitated calcium carbonate. Its broad product portfolio supports sectors like household and personal care, environmental remediation, construction materials, and industrial processes. The company operates through two primary business segments: Consumer & Specialties, and Engineered Solutions, with further product lines for each.
In recent years, the company has emphasized innovation, sustainable products, and market expansion. It focuses on research and development, highlighted by an annual R&D spend of about $23 million in FY2024 and ownership of approximately 240 patents. Other critical priorities include diversifying raw material sources, maintaining competitive technology, meeting environmental targets, and driving operational excellence across its sites.
Quarter in Review: Financial and Operational Highlights
During Q2 2025, profitability rebounded sharply from the prior quarter. Non-GAAP EPS was $1.55, marking a 36% sequential jump. The non-GAAP earnings figure beat analyst expectations by $0.14, but remained below the prior-year result of $1.65 (non-GAAP). The $528.9 million GAAP revenue result missed the consensus estimate by less than half a percent and was down 2% compared with the same period last year.
Consumer & Specialties segment sales came in at $277.7 million (GAAP), a 4% increase from the first quarter but a 2% decrease year over year. Household & Personal Care, which provides products like pet litter and fabric care minerals, saw sales of $127.4 million, up 3% sequentially and flat year over year. Specialty Additives, including advanced functional mineral blends, contributed $150.3 million in sales, up 4% from the previous quarter but 5% lower than the prior-year quarter. Segment operating income, adjusted to exclude special items, rose 24% sequentially. Sequential improvements reflected order normalization and seasonal construction demand, even as overall growth lagged targeted levels.
The Engineered Solutions segment generated $251.2 million in GAAP sales, growing 12% from Q1 to Q2 2025 but declining 2% year over year (GAAP). High-Temperature Technologies, which supplies refractory products for steelmaking, reported $178.4 million in sales, up 5% sequentially but down 3% from the prior-year quarter. The Environmental & Infrastructure product line, providing materials for large-scale environmental projects and water filtration, delivered a 35% sequential sales jump to $72.8 million, with a 1% gain versus last year. Operating income in this segment (excluding special items) rose 27% sequentially and was virtually flat year over year, at $43.7 million.
Margins improved quarter over quarter in both segments. Consumer & Specialties reached a 13.4% margin on operating income, while Engineered Solutions posted a 17.4% margin -- According to management, improved cost efficiencies, greater productivity, and disciplined cost control were primary drivers of this margin recovery. Adjusted EBITDA stood at $99.1 million, down 8% compared to Q2 2024 and up 17% compared to Q1 2025.
Cash flow from operations (GAAP) was $62.9 million, reversing a negative result in the previous quarter. Free cash flow (non-GAAP) climbed to $33.8 million, up 13% from fiscal Q2 2024 and a significant recovery from an outflow earlier in fiscal 2025. Capital expenditures rose to $29.1 million. The company returned $22 million to shareholders through share repurchases and dividends. Balance sheet liquidity remains strong with net leverage at about 1.7 times EBITDA as of Q1 2025, and roughly $700 million in liquidity available.
Recent innovation efforts included the development and rollout of new environmental solutions such as FluoroSorb, a product aimed at the remediation of "forever chemicals" called PFAS in drinking water. More than two-thirds of new products launched now feature sustainable properties. Management reported that tariff-related risks, primarily a 20% duty on magnesium oxide (used in steel-industry refractories), have been managed by building raw material inventories and diversifying sources to avoid supply disruptions.
The dividend per share was $0.11, unchanged from the previous quarter and up 10% from the prior-year quarter.
Outlook and What to Watch
Management maintained a constructive view for the second half of FY2025, targeting improvements in operating margin and continued momentum from cost-saving programs. Leadership continues to focus on restoring growth in core consumer lines, navigating raw material cost pressures, and driving new product adoption in environmental and infrastructure markets. The stringency of tariff and supply chain risks, as well as the pace of recovery in key consumer and industrial applications, will remain key factors to watch for the remainder of fiscal 2025.
MTX does pay a dividend, with the quarterly payout steady at $0.11 per share, marking a 10% increase compared to the same period last year.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
