Qnity Raises Outlook as Interconnect Growth Accelerates
Second-quarter net sales reached $1.429 billion as demand growth broadened across the electronics-materials business.
Qnity Electronics (Q), an electronics-materials maker, raised its full-year outlook after organic sales growth accelerated to 22% from 17% in the first quarter.
The quarter marked a further pickup in Qnity’s growth trajectory. Sales rose 22% year over year and 8.7% sequentially, following an 18% annual increase in the first quarter.
Adjusted earnings rose 53% to $250 million, or $1.19 a share. GAAP net income fell 31% to $136 million, while GAAP earnings declined 34% to $0.59 a share.
Volume drove the expansion, contributing 23 percentage points to companywide organic growth, while price and product mix reduced growth by one point. Interconnect Solutions recorded 28 points of volume growth with pricing flat, compared with 18 points of volume growth and a one-point price-and-mix decline at Semiconductor Technologies.
Interconnect became Qnity’s main growth engine as sales climbed 30% to $685 million and adjusted operating EBITDA rose 44% to $197 million. Semiconductor Technologies sales increased 16% to $744 million, while adjusted operating EBITDA advanced 12% to $253 million. Interconnect sales also rose 15.5% sequentially, compared with 3.0% growth at Semiconductor Technologies.
Companywide adjusted operating EBITDA increased 24% to $431 million, though its 30.2% margin narrowed about 1.1 percentage points from the first quarter as sales grew faster than earnings. Gross profit rose 23% to $666 million, while gross margin slipped to 46.6% from 47.0% sequentially.
The gap between GAAP and adjusted results widened as transformation, integration and other charges increased to $42 million from $2 million a year earlier. Qnity also recorded $61 million of interest expense and $42 million of indirect legacy costs.
Qnity now expects 2026 sales of $5.55 billion to $5.65 billion, lifting the midpoint by $300 million from its previous forecast. Adjusted operating EBITDA guidance rises to $1.675 billion to $1.725 billion, and adjusted EPS is projected at $4.40 to $4.60 a share. The company also raised its adjusted free-cash-flow forecast to $600 million to $700 million after generating $259 million in the second quarter, and it repurchased $50 million of stock during the first half under a program authorizing up to $500 million.