CONSHOHOCKEN, PA — Quaker Houghton (NYSE: KWR) reported a 10% increase in third-quarter revenue to $544.5 million as higher selling prices and new customer business offset sluggish industrial demand, although rising raw material and operating costs continued to pressure profitability.
The industrial process fluids manufacturer generated $30 million in net income, or $1.73 per diluted share, for the quarter ended Sept. 30, 2026, compared with $30.5 million, or $1.75 per share, a year earlier.
Revenue increased from $493.8 million in the third quarter of 2025, with higher selling prices and changes in product mix accounting for seven percentage points of growth. Sales volumes contributed the remaining three percentage points, primarily reflecting new business wins across the company’s geographic segments.
Adjusted earnings showed stronger growth than reported net income. Non-GAAP net income increased to $41.4 million, or $2.39 per diluted share, from $36.3 million, or $2.08 per share, a year earlier.
Adjusted earnings per share rose approximately 15%, while adjusted earnings before interest, taxes, depreciation and amortization increased 8% to $89.8 million from $82.9 million.
The adjusted EBITDA result marked the company’s second consecutive quarterly record, supported by higher sales but partially offset by increased input costs and selling, general and administrative expenses.
Quaker Houghton Chief Executive Officer and President Joe Berquist attributed the performance to new customer business across all three operating regions despite relatively weak underlying industrial activity.
“Net sales increased 10% compared with the prior year, driven by new business wins across all segments, leading to a fifth consecutive quarter of year-over-year profitability improvement,” Berquist stated.
The Americas delivered the strongest revenue growth, with sales increasing 14% from a year earlier on higher volumes and improved pricing and product mix.
Operating earnings in the region also increased, although lower operating margins and higher selling, general and administrative expenses partially offset the revenue gains.
Revenue in Asia/Pacific rose 9%, benefiting from increased volumes, pricing and product mix, and favorable foreign currency movements.
However, the region’s operating earnings declined as lower margins outweighed the benefit of higher sales. Quaker Houghton cited persistent input cost inflation and weakening industrial conditions in China.
The Europe, Middle East and Africa segment reported a 6% increase in revenue, primarily from higher pricing and changes in product mix.
Those gains were partially offset by lower sales volumes following elevated customer purchasing activity in the second quarter and unfavorable currency translation.
Despite the volume decline, EMEA operating earnings increased from a year earlier as higher revenue and improved operating margins supported profitability.
Across the company, underlying industrial market activity was flat to slightly lower than a year earlier, making new customer business an important source of volume growth.
Revenue increased approximately 2% from the second quarter of 2026, supported by higher pricing across all regions and volume gains in the Americas and Asia/Pacific.
Sequential operating earnings improved in the Americas but declined in EMEA and Asia/Pacific, reflecting lower European sales and continued margin pressure in Asian markets.
Quaker Houghton expects fourth-quarter revenue and adjusted EBITDA to increase from the comparable period in 2025 but decline from third-quarter levels because of seasonal demand patterns.
The company anticipates reduced industrial activity during the holiday season in North America and EMEA, while economic and geopolitical uncertainty is expected to weigh on demand in China.
Global raw material costs are also expected to remain elevated through the end of 2026, partly because of the continuing conflict in the Middle East.
“Activity in Asia is expected to remain soft in the fourth quarter as geopolitical and economic uncertainty have tempered industrial demand in China, and we anticipate global raw material costs will remain elevated through the end of the year as the conflict in the Middle East continues,” Berquist stated.
The company’s cash flow weakened during the first nine months of the year despite improved adjusted operating performance.
Net cash provided by operating activities totaled $47.6 million through Sept. 30, compared with $89.9 million during the corresponding period in 2025.
Quaker Houghton attributed the decline primarily to higher working capital cash outflows, partially offset by improved operating performance and reduced restructuring-related expenditures.
At the end of September, the company reported $894.6 million in gross debt and $167 million in cash and cash equivalents, resulting in approximately $727.6 million in net debt.
Net debt represented about 2.3 times trailing 12-month adjusted EBITDA of $319.3 million.
The company also repurchased 21,781 shares during the third quarter for approximately $3.3 million.
Quaker Houghton’s adjusted financial measures exclude certain nonrecurring and noncore items and are intended to supplement results prepared under generally accepted accounting principles.
The company said it remains focused on operational transformation initiatives and maintaining earnings growth into 2027 as it manages higher input costs and uneven industrial demand across its global markets.
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