World Kinect (NYSE:WKC) executives used the company’s fourth-quarter 2025 earnings call to outline a narrower strategic focus and to discuss results that management said came in below expectations amid competitive pressure in aviation fuels and weaker performance in land businesses slated for exit.
Leadership changes and strategic priorities
CEO Ira Birns, hosting his first earnings call in the role, said the company is entering 2026 with a “sharpened focus on portfolio management,” emphasizing simplicity, financial discipline, and capital allocation tied to returns on investment. Birns highlighted recent leadership appointments, including CFO Mike Tejada and President John Rau, and said conversations with employees and external stakeholders reinforced the need for a unified performance mindset.
Portfolio repositioning: aviation addition, land exits
In aviation, the company closed the acquisition of Universal Weather and Aviation’s trip support services business, which Birns said expands flight support capabilities and complements World Kinect’s global fuel distribution network. Integration is underway using what management called its proven aviation M&A playbook.
On the call, Birns told analysts the trip support business is a service business with no fuel volume attached and said its approximate gross profit is about $70 million. Because the deal closed in early November, he said the year-over-year benefit in 2025 reflects only a couple of months, while the 2026 impact should be “somewhere around” $70 million.
In land, management outlined a more dramatic reshaping. Birns said the company decided to exit its European power, energy management, and related sustainability service businesses, shifting focus “almost entirely to North America.” In North America, the company entered into an agreement to sell its tank wagon delivery and lubricants businesses to Diesel Direct and expects to close the transaction in the second quarter of 2026. Birns also said World Kinect plans to fully outsource transportation requirements for the remaining core U.S. land business to improve operating efficiency and reduce capital needs.
Tejada said the company is shedding about 1 billion gallons of volume across its exits. He added that the Diesel Direct transaction is expected to return approximately $100 million of capital through sales proceeds and working capital recovery.
Q4 results: volumes down, land weakness and aviation margin pressure
Tejada said total fourth-quarter volume was 4.2 billion gallons, down 5% year-over-year, and full-year volume was 16.9 billion gallons, down about 4%. Fourth-quarter gross profit was $235 million, down 9% year-over-year and “slightly below guidance,” primarily due to land performance. Full-year consolidated gross profit was $948 million, down 8% from 2024, reflecting year-over-year declines in marine and land gross profit partially offset by growth in aviation.
Birns said fourth-quarter performance fell short of expectations for two main reasons: a more competitive environment that pressured aviation fuel margins and weaker land results driven by lower-return lines of business the company is exiting. He added that the core land businesses—cardlock, retail, and natural gas—performed generally as expected in the quarter.
- Aviation: Q4 volumes were 1.8 billion gallons, down 5% year-over-year, which Tejada attributed to a more disciplined approach to maintaining return levels. Despite lower volumes, Q4 aviation gross profit rose about 8% to $130 million, driven primarily by the Universal trip support acquisition. Tejada said the core fuels business was slightly weaker than anticipated due to increased competitive pressure on margins. Full-year aviation gross profit was $526 million, up 8%.
- Land: Q4 volumes declined 9% year-over-year, with full-year land volumes down 8% to 5.6 billion gallons. Tejada said declines were largely tied to deliberate exit activity. Q4 land gross profit was $71 million, down 32% and slightly below expectations, reflecting unfavorable market conditions in certain non-core businesses and impacts from exits including Brazil, certain North America operations at the end of 2024, and the U.K. land business sold in the second quarter of 2025. Full-year land gross profit was $298 million, down 22%.
- Marine: Q4 volumes were about 4.1 million metric tons, flat year-over-year, while full-year volumes declined 5%. Q4 marine gross profit rose 2% to $35 million due to strong performance in certain physical locations, but full-year gross profit declined 21%, which Tejada attributed to a low fuel price and volatility environment.
Impairments, restructuring charges, and cost actions
Tejada said total non-GAAP adjustments in the fourth quarter were $325 million, or $296 million after tax. The largest item was $247 million of non-cash intangible and other asset impairments, “primarily within our land segment,” driven largely by decisions to exit additional lines of business that did not meet return thresholds. The company also recorded $77 million of restructuring and exit-related charges tied largely to land exits and broader transformation initiatives. Tejada said the company anticipates “some residual non-recurring exit-related costs” into the first half of 2026 as transactions close and activities wind down.
Adjusted operating expenses in Q4 were $186 million, down 6% year-over-year, driven by lower incentive compensation and land exits. Full-year adjusted operating expenses declined about 7% to $718 million. Tejada said the company expects further cost benefits from the land repositioning while continuing to invest in platforms and efficiency initiatives, including advanced analytics and AI-enabled tools.
Guidance approach shifts; 2026 EPS outlook and capital return
Management said it will transition in 2026 to providing full-year adjusted EPS guidance, while continuing to share insight into anticipated quarterly segment performance. Tejada said the change better reflects how the company manages seasonality and market volatility. For the first quarter of 2026, he said adjusted EPS is expected to be down versus the prior year and relatively flat sequentially. For full-year 2026, the company guided to adjusted EPS of $2.20 to $2.40.
On segment outlook, Tejada said:
- Q1 aviation gross profit is expected to be up year-over-year due to the trip support acquisition and organic international growth, more than offsetting competitive pressure.
- Q1 marine gross profit is expected to be generally in line with the prior year.
- Consolidated Q1 gross profit is expected to be down versus the prior year and sequentially, driven principally by land exit activity.
In land, Tejada said the refocused business will be primarily North America cardlock, retail, and natural gas, and while 2026 volumes and gross profit are expected to be “meaningfully lower,” adjusted operating income is expected to “nearly double” as underperforming businesses are exited and the cost structure improves. He added that the operating margin in the land business should increase substantially toward the company’s target level of 30%.
Tejada reported fourth-quarter operating cash flow of $34 million and free cash flow of $13 million. For full-year 2025, operating cash flow was $293 million and free cash flow was $227 million, which he said exceeded targets. The company repurchased $40 million of shares in the fourth quarter and $85 million for the full year, with total capital return through dividends and buybacks of $126 million in 2025. Tejada also noted the board approved an incremental $150 million share repurchase authorization, and the company completed an additional $75 million of share repurchases after year-end.
During the quarter, the company amended and extended its $2 billion senior unsecured credit facility to November 2030, with a one-year extension option. Tejada said the amended facility improves pricing and flexibility and supports liquidity.
In response to analyst questions, Birns said competitive pressure in aviation may be “temporarily” persistent, and that contract renewals around mid-year could provide more visibility on margins. In marine, he said the biggest driver of upside has historically been fuel price and volatility, and he does not expect anything materially to change in 2026; any improvement would be upside to guidance.
Closing the call, Birns said World Kinect is now a “simpler, more focused business model” aimed at leveraging its platform to deliver fuel and related services, with an emphasis on disciplined execution and clearer transparency as 2026 progresses.
About World Kinect (NYSE:WKC)
World Kinect Energy Services, Inc (NYSE: WKC) is a global energy services company specializing in fuel procurement, supply chain management and risk mitigation solutions. The company offers an integrated platform that facilitates the sourcing, trading and logistics of refined fuels, natural gas, liquefied natural gas (LNG) and renewable energy products. Its services are designed to help industrial, commercial and institutional clients optimize energy costs, comply with environmental regulations and manage price volatility.
In addition to traditional commodity trading and delivery, World Kinect provides a suite of value-added services that include carbon offset and decarbonization strategies, energy efficiency consulting and emissions reporting.
