Olin (OLN -2.02%), a diversified chemicals producer with operations spanning chlorine-based products, epoxy resins, and ammunition, reported its second-quarter 2025 results on July 28, 2025. The highlight of the release was revenue of $1,758.3 million, which exceeded analyst expectations of $1,658.8 million by 6.0% (GAAP). However, Olin posted a GAAP loss per share of ($0.01) for Q2 2025, missing the consensus forecast of a $0.01 profit (GAAP). This was a reversal from the prior year, when GAAP earnings per share reached $0.62. Adjusted EBITDA also fell 36.6% to $176.1 million compared to the same period last year. While revenue growth remained solid, profitability was pressured by rising input costs, scheduled maintenance expenses, and persistent weakness in some end-markets, resulting in a subdued overall performance.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($0.01) | $0.01 | $0.62 | (101.6 %) |
| Revenue (GAAP) | $1,758.3 million | $1,658.8 million | $1,644.0 million | 7.0 % |
| Adjusted EBITDA (Non-GAAP) | $176.1 million | $278.1 million | (36.7 %) | |
| Revenue – Chlor Alkali Products and Vinyls | $979.5 million | $920.3 million | 6.4 % | |
| Revenue – Epoxy | $331.2 million | $317.7 million | 4.2 % | |
| Revenue – Winchester | $447.6 million | $406.0 million | 10.2 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Critical Success Factors
Olin runs three primary businesses: Chlor Alkali Products and Vinyls, Epoxy, and Winchester. The Chlor Alkali segment produces chemicals such as chlorine, caustic soda, and vinyls, which are essential in manufacturing, water treatment, and more. Epoxy focuses on epoxy resins and intermediates, used in coatings, composites, and electronic materials. Winchester manufactures ammunition for military, law enforcement, and commercial markets.
Recently, the company has focused on maximizing value in its core Chlor Alkali business, deepening integration in Epoxy, and expanding the Winchester military channel. Key success factors have included maintaining low production costs, securing long-term military contracts, and managing capital allocation by balancing investment, share repurchases, and dividends. Olin has also emphasized integration across its chemical operations to leverage raw material advantages and improve efficiency.
Quarterly Results: Segment Highlights and Financial Trends
The quarter revealed sharp divergences across Olin's main business lines. Chlor Alkali Products and Vinyls revenue climbed 6.4% compared to Q2 2024, driven by seasonal demand improvement. Chlor Alkali Products and Vinyls segment earnings dropped 34.6% compared to Q2 2024, held back by lower prices, especially for ethylene dichloride (a base chemical used in plastics), and higher maintenance costs. Planned plant shutdowns and ongoing price weakness diluted the benefit of higher volumes.
In the Epoxy segment, which produces epoxy resins for industrial and consumer end-markets, Epoxy segment revenue grew 4.2% compared to Q2 2024. Still, the division posted a deeper operating loss than last year. The main drivers were rising operating costs tied to scheduled maintenance, along with continued global oversupply and aggressive competition from Asian manufacturers. Profit margins stayed flat year over year.
Winchester, the ammunition business, saw sales rise 10.3% compared to Q2 2024, primarily due to increased military and government project shipments. Winchester segment earnings declined approximately 64% compared to Q2 2024. While military revenue increased, commercial ammunition sales fell, and pricing remained weak due to retailer destocking and lower consumer demand. Raw material costs, notably for metals and propellants, escalated as tariffs and tight supply pushed up input prices. The segment faced a material earnings squeeze, despite robust government contracts and the benefits of newly acquired assets.
Restructuring charges totaled $7.4 million. The company's net debt to adjusted EBITDA ratio rose to 3.9 times for the trailing twelve months as of June 30, 2025, reflecting lower earnings rather than significant new borrowings. Share buybacks totaled 0.5 million shares for $10.1 million, The cash position was $223.8 million. The $0.20 per share quarterly dividend was maintained, unchanged from prior periods.
Business Model and Product Lines Explained
The Chlor Alkali Products and Vinyls business is at the heart of Olin's strategy. Its output -- especially chlorine and caustic soda -- feeds a broad range of manufacturing industries, from plastics to paper production and water purification. Olin's position as a large, integrated producer provides cost advantages, particularly through its joint venture with Mitsui, which expands global trading reach. Maintaining competitiveness in this capital-intensive field relies on efficient operations, scale, and management of logistics networks.
Epoxy is a smaller share of company sales, but its products are vital components in coatings, electronics, composites, and wind turbine blades. Integration with Olin's own chemical supply chain is a key cost advantage here. The company's recent focus in this segment has been on shifting toward more specialized formulated solutions and managing through global price and cost pressure. For Winchester, the ammunition family includes rounds for commercial, law enforcement, and military use, with long-term U.S. military contracts and recent acquisitions (such as AMMO Inc. assets) providing growth opportunities. Performance in Winchester depends on both robust government demand and cyclical consumer trends.
Outlook and Investor Considerations
Looking ahead, Olin's management expects adjusted EBITDA (non-GAAP) for Q3 2025 to be in the range of $170 million to $210 million, signaling little sequential improvement from Q2 2025 and reflecting continued tough conditions, cost inflation, and market uncertainty. The leadership emphasized a disciplined approach to capital spending, with guidance for 2025 capital expenditures trimmed by $25 million as part of broader cost controls. No upward revision was offered to full-year earnings expectations.
The company reiterated its commitment to share repurchases and sustaining its dividend. The quarterly dividend was left unchanged at $0.20 per share. Investors may want to monitor trends in global chemical pricing, U.S. defense spending, and raw material costs, as these have each shown to significantly impact Olin's profitability.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
