Breaking Down SunCoke Energy, Inc. (SXC) Financial Health: Key Insights for Investors

You're looking at SunCoke Energy, Inc. (SXC) right now, and the numbers from the third quarter of 2025 tell a story of a business in transition, which is why a deep dive is defintely needed. While the Domestic Coke segment faced headwinds-like the deferral of roughly 200,000 tons of coke sales due to a customer contract breach-the new Industrial Services segment, bolstered by the Phoenix Global acquisition, is providing a crucial offset. The company's revised full-year 2025 guidance projects Consolidated Net Income to land between $48 million and $58 million, with Consolidated Adjusted EBITDA expected to be in the $220 million to $225 million range. That's a tight range, and it signals management is confident, but the core business risk is real. Still, a 7.1% annualized dividend yield is hard to ignore in this market, so let's map out exactly where the near-term risks lie and what that dividend yield is really costing the balance sheet.

Revenue Analysis

You need to know where the money is coming from to truly understand SunCoke Energy, Inc. (SXC)'s financial health. The direct takeaway here is that the company is navigating a challenging year in its core cokemaking business, with an expected full-year revenue dip, but its new Industrial Services segment is starting to provide a critical offset.

The latest full-year 2025 revenue is currently estimated at around $1.59 billion, which is a significant expected decrease from the 2024 annual revenue of $1.94 billion. This decline is not a surprise, but it does highlight the cyclical pressures on their primary business. For the trailing twelve months (TTM) ending September 30, 2025, revenue stood at $1.84 billion, reflecting a year-over-year contraction of -6.44%. That's a clear signal of market softness.

SunCoke Energy, Inc. essentially operates two distinct, yet complementary, revenue streams:

• Domestic Coke: The historical core, producing metallurgical coke for steel and cast iron production.
• Industrial Services: A growing segment focused on material handling, logistics, and, now, the newly acquired Phoenix Global business.

The Domestic Coke segment is the primary revenue driver, but it is currently under pressure. In the third quarter of 2025, consolidated revenue was $487.0 million, a slight decrease of -0.6% compared to the same period last year. The drag came from a less favorable mix of contract versus spot coke sales, plus lower economics from the Granite City contract extension. Honestly, that kind of contract mix shift can really hurt margins, even if the volume stays somewhat steady.

Here's a quick look at the recent revenue performance and the key drivers of change:

The most significant change in the revenue structure this year is the August 1, 2025, acquisition of Phoenix Global. This immediately bolstered the new Industrial Services segment, which now includes the former logistics business. The Industrial Services segment's revenue increased in Q3 2025, directly driven by the addition of two months of Phoenix Global's results. This is a strategic move to diversify away from the pure-play coke market, but still, volumes at their existing logistics terminals were lower than expected due to persistent weak market conditions. You can read more about the full picture in Breaking Down SunCoke Energy, Inc. (SXC) Financial Health: Key Insights for Investors.

Profitability Metrics

You want to know if SunCoke Energy, Inc. (SXC) is making money and how efficiently. The direct takeaway from the 2025 fiscal year data is clear: profitability is under pressure, largely due to external market headwinds and specific contract challenges, but the company remains net positive. We're seeing a definite compression in margins, but it's still a profitable operation.

Looking at the Trailing Twelve Months (TTM) data as of mid-2025, SunCoke Energy, Inc. generated approximately $1.85 billion in revenue. Here's the quick math on how that translated to profit before the full impact of the Q3 contract breach hit the numbers:

• Gross Profit: Around $300.44 million (a 16.24% Gross Margin).
• Operating Profit: Roughly $101.75 million (a 5.5% Operating Margin).
• Net Profit: Approximately $65.20 million (a 3.53% Net Profit Margin).

The full-year 2025 guidance, revised in November 2025, projects Consolidated Net Income to land between $48 million and $58 million. This is a tight range, and it reflects the challenging, defintely volatile environment.

Trends in Profitability and Operational Efficiency

The trend over 2025 is a story of strategic diversification battling core business headwinds. The company's Domestic Coke segment, its largest unit, faced significant pressure. This was driven by lower spot coke sales volumes and the renegotiated, lower economics of the Granite City cokemaking contract with U.S. Steel, which was extended through the end of 2025. A major hit came in Q3 2025 with a customer contract breach that deferred approximately 200,000 tons of coke sales, forcing a revision of the full-year outlook.

Still, operational efficiency in the Logistics segment provided a crucial offset. This segment, which handles over 40 million tons of materials annually, delivered strong results in Q1 2025 due to higher transloading volumes. Plus, the acquisition of Phoenix Global, completed on August 1, 2025, is a key strategic move. It immediately contributed positively to the Industrial Services segment in Q3, and the company expects to realize synergies (cost savings and revenue gains) from the acquisition in 2026.

Industry Comparison of Profitability Ratios

When you compare SunCoke Energy, Inc.'s TTM profitability ratios to the broader coal mining industry averages, you see a significant difference. SunCoke Energy, Inc. is a coke producer and logistics provider, not a pure coal miner, which accounts for some of the margin disparity. However, it still highlights the competitive pressure in the value-added coke production business.

Here's the breakdown of the TTM ratios as of mid-2025:

The industry is facing its own challenges, with general coking enterprises seeing margins estimated between just 1% and 3% in May 2025, down from 5%-8% in 2024. SunCoke Energy, Inc.'s superior Net Profit Margin of 3.53% (TTM) suggests its long-term, take-or-pay contracts and stable logistics business provide a buffer against the extreme volatility seen in the spot coking market. This is the core of their business model, and it's holding up, but not thriving, in the current downturn. For a deeper look at the balance sheet risks, check out Breaking Down SunCoke Energy, Inc. (SXC) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You need to know exactly how SunCoke Energy, Inc. (SXC) is funding its operations and growth, especially as they execute on strategic acquisitions. The direct takeaway is that SunCoke Energy, Inc. operates with a higher-than-average financial leverage for its sector, but recent proactive refinancing has bought them significant time and stability against rising interest rates.

Overview of Debt Levels (2025 Fiscal Year)

As of the most recent balance sheet data, SunCoke Energy, Inc. is carrying approximately $691.1 million in total debt against $726.1 million in total shareholder equity. This debt is overwhelmingly long-term, sitting at roughly $691 million as of September 2025. Short-term liabilities, a proxy for immediate debt obligations, stand at around $227.9 million. Here's the quick math: nearly all their debt is structured to mature past the next 12 months, which is a good sign for near-term liquidity.

• Total Debt: $691.1 million.
• Total Equity: $726.1 million.
• Short-Term Liabilities: $227.9 million.

Leverage and Industry Comparison

The key metric here is the Debt-to-Equity (D/E) ratio, which measures a company's financial leverage (how much debt is used to finance assets relative to shareholder equity). SunCoke Energy, Inc.'s D/E ratio currently sits at about 0.95 (or 95.2%). This means for every dollar of equity, the company has 95 cents of debt. To be fair, a ratio below 1.0 is often seen as healthy, but context is everything.

When you compare this to the industry average for Coking Coal, which is closer to 0.34, you see the leverage is significantly higher. For example, a peer like Ramaco Resources has a D/E ratio of just 0.26. This tells you that SunCoke Energy, Inc. is defintely more debt-reliant than its pure-play peers. This leverage can boost returns in good times, but it raises the risk profile when the steel market softens.

Recent Refinancing and Credit Strategy

The company is balancing debt financing and equity funding by being highly strategic with its debt maturity schedule. In July 2025, SunCoke Energy, Inc. proactively amended its revolving credit facility, extending the maturity date out to July 2030. This move reduces refinancing risk dramatically, which is crucial in a high-interest-rate environment. Also, they reduced the total commitment on that facility to $325 million.

This debt maneuver directly supported the funding of the $325 million acquisition of Phoenix Global in August 2025. The transaction was funded using a combination of the credit facility and cash on hand. The market has acknowledged this disciplined approach: S&P Global Ratings affirmed the company's 'BB-' issuer credit rating in May 2025, with a stable outlook, noting that while debt will increase post-acquisition, leverage is expected to remain manageable. They are using debt to grow and diversify, but they're not letting their capital structure become a liability. You can read more in our full analysis: Breaking Down SunCoke Energy, Inc. (SXC) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if SunCoke Energy, Inc. (SXC) can cover its near-term obligations, especially with the market volatility we've seen in 2025. The short answer is yes, they have a solid liquidity position, but the recent acquisition has shifted the cash flow picture. You're defintely looking at a company that prioritizes maintaining a strong cash cushion.

As of the most recent quarter, SunCoke Energy, Inc.'s liquidity ratios are a clear strength. The Current Ratio (current assets divided by current liabilities) sits at approximately 2.12. This means the company has over two dollars in current assets for every dollar of current liabilities, a very healthy buffer. The Quick Ratio (which strips out inventory, a less liquid asset) is also strong at around 1.07. A quick ratio above 1.0 is the gold standard for immediate debt-paying ability, so SunCoke Energy, Inc. passes this test easily.

Here's the quick math on their short-term financial health:

• Current Ratio: 2.12 (Strong ability to pay short-term debts).
• Quick Ratio: 1.07 (Excellent capacity to cover immediate obligations without selling inventory).
• Working Capital: Approximately $256.10 million.

Working capital-the difference between current assets and current liabilities-was a substantial $256.10 million. This positive trend gives management a lot of operational flexibility. It means they aren't scrambling for cash to fund day-to-day operations or cover unexpected costs. The only real liquidity concern is managing the integration of the Phoenix Global acquisition, but the balance sheet seems well-prepared for it.

The cash flow statement for the last twelve months (LTM) ending Q3 2025 tells the full story of where the money is actually moving. You want to see strong cash flow from operations, and SunCoke Energy, Inc. delivered an LTM Operating Cash Flow of $113.40 million. This is the lifeblood of the company, showing their core business is generating real cash.

However, the 2025 investing and financing activities show a significant capital deployment. The acquisition of Phoenix Global for $325 million was a major use of cash in the Investing Activities section. To fund this, the company turned to the Financing Activities section, issuing approximately $195 million in new debt during the third quarter alone.

Here is a breakdown of the cash flow trends, illustrating the capital allocation strategy in 2025:

The net cash inflow from financing activities in Q3 2025 was $182 million, largely offsetting the acquisition cost and demonstrating a willingness to take on debt for strategic growth. Still, it's important to watch the debt-to-equity ratio going forward. For a deeper look at who is betting on this strategy, you should check out Exploring SunCoke Energy, Inc. (SXC) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at SunCoke Energy, Inc. (SXC) and wondering if the market has it right, especially with the stock trading near its 52-week low. The quick answer is that the company looks significantly undervalued based on its assets (Price-to-Book) and cash flow (EV/EBITDA), but the market is clearly discounting it due to near-term risks and a tough 12 months.

As a seasoned analyst, I see a clear disconnect between SunCoke Energy, Inc.'s fundamental valuation multiples and its recent stock performance. The stock has been hammered, losing nearly 45% of its market capitalization over the last 12 months as of November 2025, falling from a 52-week high of $12.82 to trade near its 52-week low of $6.25. That's a massive drop, and it's why the company's valuation ratios look so compellingly low right now.

Here's the quick math on core valuation metrics based on the latest 2025 fiscal year data:

• Price-to-Earnings (P/E) Ratio: The trailing P/E is about 8.66. To be fair, the forward P/E, which uses analyst earnings estimates for the next year, is a bit higher at 10.82. Both are well below the broader market average, signaling that investors are paying very little for each dollar of SunCoke Energy, Inc.'s current earnings.
• Price-to-Book (P/B) Ratio: This is the most striking number. The P/B ratio is only 0.79. This means the stock is trading for less than its book value, or the value of its net assets on the balance sheet. Honstly, that's a classic indicator of potential undervaluation, suggesting the market thinks the assets won't generate enough future cash flow.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio, which measures the total value of the company (Enterprise Value) against its operating cash flow proxy (EBITDA), is around 5.24x. For a capital-intensive materials company, a multiple in the low-to-mid single digits is generally considered cheap, especially when compared to the historical average for the sector.

The low P/B and EV/EBITDA ratios strongly suggest SunCoke Energy, Inc. is currently undervalued, but you have to understand why the market is pricing it this way. It's a trend-aware realist's view of an industry facing secular headwinds, even if the company's operational performance, like its Q3 2025 earnings beat, was strong [cite: 11 (from first search)].

Dividend and Analyst Consensus: A Clear 'Hold' Signal

The dividend story is a major part of the investment thesis here. SunCoke Energy, Inc. offers an exceptionally high dividend yield of about 7.40%. The company has an annual dividend of $0.48 per share. Plus, the dividend payout ratio is sustainable at roughly 63.2% of earnings [cite: 2 (from first search), 4 (from first search)], meaning they aren't paying out more than they can afford, which is defintely a good sign for income investors.

Still, Wall Street is cautious. The analyst consensus is a clear 'Hold' rating [cite: 7 (from first search), 11 (from first search), 13 (from first search)]. Two analysts have recently reiterated this 'Hold' rating [cite: 7 (from first search), 11 (from first search)]. The average target price sits at $10.00 [cite: 7 (from first search), 11 (from first search), 13 (from first search)]. What this estimate hides is the potential for a 55.52% upside from the current price if that target is met [cite: 13 (from first search)]. The analysts are saying: the stock is cheap, but the path to that target price is uncertain.

If you want to dive deeper into the company's long-term strategic direction, you should review their Mission Statement, Vision, & Core Values of SunCoke Energy, Inc. (SXC).

For your action plan, the core valuation metrics are summarized here:

Risk Factors

You're looking at SunCoke Energy, Inc. (SXC) and trying to map out the near-term risks, and honestly, the Q3 2025 reports paint a picture of operational strength running headfirst into contract and debt challenges. The biggest immediate concern isn't the market-it's the cash flow hit from a key customer's contract breach.

The core risk is a significant operational and financial shock: a customer, Algoma, breached their coke contract, forcing SunCoke Energy, Inc. to defer and store approximately 200,000 tons of coke sales. Here's the quick math: this single event caused the company to slash its full-year 2025 Operating Cash Flow guidance to a range of just $62 million to $72 million, a massive drop from the original $165 million to $180 million estimate. That's a defintely material impact on liquidity.

Near-Term Operational and Contract Headwinds

The contract breach is the headline, but it's not the only pressure point. The Domestic Coke segment is facing lower economics from the extended Granite City contract with U.S. Steel, which now runs through December 31, 2025. Plus, the Logistics segment, which includes Convent Marine Terminal, has seen lower volumes due to persistent weak market conditions, which is a clear external risk.

What this estimate hides is the strain on free cash flow (FCF). The deferred cash receipts from that breach, coupled with transaction costs, forced a revision of the 2025 FCF guidance to a range of negative $10 million to $0. That's a tight spot for a company committed to a quarterly dividend of $0.12 per share, which is payable on December 1, 2025. You want to see positive FCF to fund that dividend, so this is a crucial metric to watch.

• Customer Concentration: Reliance on a few large customers exposes the Domestic Coke segment to major financial swings from a single contract dispute.
• Metallurgical Market Volatility: Weak seaborne steel demand and excess coke supply pressure spot market margins.
• Contract Renewal Risk: The Granite City contract extension, while providing stability through year-end, came with less favorable terms.

Financial Leverage and Integration Risk

The strategic acquisition of Phoenix Global on August 1, 2025, while diversifying the business into the Industrial Services segment, has created an immediate financial risk. The $325 million transaction significantly increased the company's debt load. Total debt climbed to $699 million as of September 30, 2025, up from $500 million at the end of 2024. The gross leverage ratio now stands at a much higher 3.05x.

The other side of this is integration. SunCoke Energy, Inc. expects to realize annual synergies of $5 million to $10 million from Phoenix Global, but integration challenges could delay or reduce that benefit. The acquisition also dramatically reduced liquidity, which now sits at approximately $206 million, down from $540 million at the end of 2024. That's a significant drop in available capital.

Mitigation Strategies and Clear Actions

Management is not sitting still. To mitigate the contract breach risk, SunCoke Energy, Inc. is actively pursuing all legal remedies to recover financial losses from the customer. Strategically, the Phoenix Global acquisition is a long-term hedge, diversifying the company's revenue base into electric arc furnace (EAF) mill services and international markets, which is less tied to the blast furnace coke cycle. Operational focus is on asset utilization optimization and strengthening customer relationships, which is a necessary step given the recent contract issues.

For a deeper dive into the ownership structure behind these decisions, you should read Exploring SunCoke Energy, Inc. (SXC) Investor Profile: Who's Buying and Why?

Your action now is to monitor the legal proceedings and the Q4 2025 liquidity report. Finance: track the debt-to-EBITDA ratio for Q4 to see if it stabilizes below 3.0x.

Growth Opportunities

You're looking at SunCoke Energy, Inc. (SXC) and seeing a business navigating a tough cyclical market, but you need to know where the real money will come from next. The short answer is: the company is strategically shifting its revenue mix toward a more stable, diversified Industrial Services segment, plus it's locking down long-term coke contracts.

For the 2025 fiscal year, the consensus revenue estimate sits around $1.79 billion, with an Earnings Per Share (EPS) forecast of about $0.55. This reflects the margin compression in the core Domestic Coke business due to renegotiated contracts and a challenging spot market. But, the company's revised Consolidated Adjusted EBITDA guidance of $220 million to $225 million for 2025, even with market headwinds, shows the resilience of its contractual model and the growing contribution from logistics.

Strategic Initiatives and Acquisitions

The biggest near-term growth driver is the expansion of the Industrial Services segment, which now includes the former Logistics business. This segment got a major boost with the Phoenix Global acquisition, completed on August 1, 2025. Here's the quick math: this acquisition is expected to boost the company's production capacity by 20% by late 2025, immediately adding volume to the Industrial Services segment, which delivered $18.2 million in adjusted EBITDA in the third quarter of 2025. This is a clear move to diversify the revenue base and mitigate volatility from coke sales.

Also, the company is defintely focused on securing volume. They recently extended a cokemaking agreement with Cleveland-Cliffs Inc., which will supply 500,000 tons of metallurgical coke annually from the Haverhill facility starting in January 2026. That long-term commitment provides a stable, predictable cash flow stream, which is exactly what you want in a cyclical commodity business.

Competitive Advantages and Logistics Power

SunCoke Energy, Inc.'s competitive advantages are structural, not fleeting. They center on two things: superior technology and a unique logistics footprint. The company uses heat recovery cokemaking technology, which is more energy-efficient and has a lower environmental impact compared to traditional methods, a key factor as environmental regulations tighten.

Plus, the logistics network is a powerhouse. The Industrial Services segment handles over 40 million tons of coal and bulk materials annually through strategically located terminals like the Convent Marine Terminal (CMT) and Kanawha River Terminal (KRT). This scale and location give them a cost-effective edge in material handling for coal, steel, and power customers. The long-term, take-or-pay supply agreements are the bedrock of the company's stability, with over 40% of the annual supply already contracted until at least 2032, protecting against sudden drops in demand.

• Technology: Heat recovery coke making is more efficient.
• Contracts: Long-term, take-or-pay agreements ensure revenue stability.
• Logistics: Over 40 million tons handled annually at strategic terminals.
• Acquisition: Phoenix Global adds 20% capacity for diversification.

If you want to dig deeper into who is betting on this strategy, you should check out Exploring SunCoke Energy, Inc. (SXC) Investor Profile: Who's Buying and Why?

The key action for you is to monitor the integration of Phoenix Global and the performance of the Industrial Services segment. If that segment's EBITDA continues to grow and offset the volatility in the coke market, the company's valuation should improve.