Overview

Olin Corporation, a diversified chemical company, reported net income of $1.4 million for the first quarter of 2025, down significantly from $48.6 million in the same period of 2024. This decrease was primarily due to lower operating results across the company’s Winchester and Epoxy business segments, partially offset by improved performance in the Chlor Alkali Products and Vinyls segment.

Diluted earnings per share was $0.01 in Q1 2025, compared to $0.40 in the prior year quarter, a decrease of $0.39 per share. The company’s gross margin percentage declined from 13% in Q1 2024 to 9% in Q1 2025.

Segment Performance

Chlor Alkali Products and Vinyls This segment reported income of $78.3 million in Q1 2025, up slightly from $76.6 million in the prior year quarter. The increase was driven by higher sales volumes, partially offset by lower pricing, primarily for ethylene dichloride (EDC), as well as higher raw material and operating costs.

Epoxy The Epoxy segment reported a loss of $28.4 million in Q1 2025, compared to a loss of $11.8 million in Q1 2024. The decrease was due to higher operating costs, lower product pricing, and decreased sales volumes. The Epoxy business continues to be challenged by subsidized Asian competition.

Winchester Winchester segment income declined to $22.8 million in Q1 2025 from $72.2 million in the prior year quarter. This was driven by lower commercial sales volumes, higher commodity and operating costs, and lower product pricing, partially offset by increased military sales.

Liquidity and Financing

During Q1 2025, Olin repurchased and retired 0.7 million shares of common stock at a total value of $20.2 million. As of March 31, 2025, the company had $1,978.9 million remaining authorized for share repurchases.

In March 2025, Olin issued $600 million of 6.625% senior notes due 2033 and entered into a new $1.85 billion senior credit facility, which increased the borrowing limit and extended the maturity date of the previous credit facility. Proceeds were used to redeem existing senior notes and refinance the prior credit facility.

As of March 31, 2025, Olin had $1,124.6 million available under its revolving credit facility. The company’s debt to total capitalization ratio increased to 59.8% from 58.0% at the end of 2024, primarily due to the higher debt levels.

Outlook

For the second quarter of 2025, Olin expects operating results from its Chemical businesses to be comparable to Q1, despite increased costs from a delayed first quarter maintenance turnaround. The company anticipates seasonal volume improvements and strengthened caustic soda pricing in the Chlor Alkali Products and Vinyls segment.

Winchester’s second quarter results are expected to improve from Q1 due to seasonally stronger commercial demand and higher military sales. Other corporate and unallocated costs in 2025 are expected to be higher than the $90.1 million incurred in 2024.

Olin forecasts environmental expenses of $25-35 million in 2025, compared to $30.2 million in 2024. Non-operating pension income is expected to be lower than the $26.0 million in 2024. The company anticipates 2025 capital spending of $200-220 million and depreciation/amortization of approximately $525 million.

The 2025 effective tax rate is currently expected to be in the 25-30% range, with cash taxes paid of $175-200 million, primarily for foreign earnings.

Analysis

Olin’s first quarter results reflect the continued challenges facing its Epoxy and Winchester segments, which offset the modest improvement in the Chlor Alkali Products and Vinyls business. The Epoxy division remains under pressure from subsidized Asian competition, leading to lower pricing and profitability. Winchester also struggled with lower commercial sales volumes, higher costs, and pricing pressure.

The company’s liquidity position remains solid, with ample availability under its revolving credit facility. However, the increase in the debt to capitalization ratio indicates Olin is relying more heavily on borrowings to fund operations and investments. The refinancing activities in the quarter extended debt maturities but also increased interest expense.

Looking ahead, Olin expects the second quarter to show some seasonal improvement, particularly in the Winchester segment. However, the outlook for the full year remains cautious, with higher corporate costs, pension headwinds, and ongoing competitive pressures in Epoxy. The company’s ability to manage costs and maintain pricing discipline will be critical to navigating the current environment.

One area of concern is the continued decline in Olin’s gross margin percentage, which fell to just 9% in Q1 2025. Restoring profitability and margins across the business segments will be a key priority for management. The company’s restructuring initiatives and strategic investments may help, but the timeline for a meaningful recovery remains uncertain.

Overall, Olin faces a mixed outlook, with pockets of strength in Chlor Alkali offset by persistent challenges in Epoxy and Winchester. Prudent financial management, including the share repurchase program, provides some support, but the company will need to demonstrate an ability to improve operational performance to drive shareholder value going forward.