World Kinect (WKC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $10.5 billion, down 14% year-over-year, with gross profit of $268.1 million, down 5%, and net income of $33.5 million, nearly flat year-over-year.

• Adjusted EBITDA for Q3 was $100.1 million, down 1% year-over-year; adjusted diluted EPS rose 7% to $0.62.

• Total volumes were 4.4 billion gallons, a 2% decrease from the prior year.

• Share repurchases totaled $28 million in Q3, reflecting confidence in performance and commitment to shareholder value.

• The sale of Avinode in Q2 2024 resulted in a significant gain and impacted aviation segment results.

Financial highlights

• Q3 2024 gross profit was $268.1 million, down 5% year-over-year; operating expenses fell 6% to $195.8 million.

• Q3 diluted EPS was $0.57, down 2% year-over-year; adjusted diluted EPS was $0.62, up 7%.

• Net income for the nine months ended September 30, 2024 was $169.2 million, up from $87.7 million in the prior year period, including an $84.8 million after-tax gain on sale.

• Operating cash flow for Q3 was negative $38.5 million, mainly due to seasonal working capital needs in aviation; year-to-date positive $139.6 million.

• Cash and cash equivalents increased to $373.8 million as of September 30, 2024.

Outlook and guidance

• Q4 2024 consolidated gross profit expected between $253 million and $260 million.

• Adjusted operating expenses for Q4 projected at $194–198 million, about 5% lower year-over-year.

• Q4 interest expense expected at $23–25 million; full-year 2024 tax rate guidance is 17–19%.

• Land segment gross profit in Q4 expected to be flat to slightly up year-over-year; marine gross profit expected to be lower due to reduced volatility and lower bunker fuel prices.

• Management remains focused on driving growth in core business activities and refining the land portfolio to enhance operating efficiencies and returns.