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Chemours (CC) Down 22.2% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

It has been about a month since the last earnings report for Chemours (CC). Shares have lost about 22.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Chemours due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Chemours’ Earnings Top, Revenues Miss Estimates in Q3

Chemours reported profit of $76 million or 46 cents per share in the third quarter of 2019, down 72.4% from profit of $275 million or $1.51 per share a year ago.

Adjusted earnings were 59 cents per share for the quarter, which surpassed the Zacks Consensus Estimate of 56 cents.

Net sales fell 14.6% year over year to $1,390 million, hurt by lower volume in the company’s Titanium Technologies unit, and reduced volume and prices in the Fluoroproducts unit. Revenues lagged the Zacks Consensus Estimate of $1,393 million.

Segment Highlights

Revenues in the Fluoroproducts segment fell 6.8% year over year to $636 million in the reported quarter. The favorable impact of the adoption of Opteon refrigerants was more than offset by illegal imports of HFC refrigerants into the European Union and weaker demand for base refrigerants.

Revenues in the Chemical Solutions unit were $140 million, down 9.7% year over year. The company saw lower prices in the quarter mainly on account of mix and lower cost pass-throughs in Performance Chemicals and Intermediates.

Revenues in the Titanium Technologies division were $614 million, down 22.4% from the prior-year quarter. The decline is attributable to lower volume of Ti-Pure TiO2.

Financials

Chemours ended the quarter with cash and cash equivalents of $694 million, down 45.6% year over year. Long-term debt was $4,007 million, up 0.6% year over year.

Cash flows provided by operating activities were $288 million for the third quarter of 2019, down 15.8% year over year.

Outlook

The company expects to witness weaker economic activity, moving ahead. It anticipates initiatives such as application development work in Fluoroproducts and Ti-Pure Value Stabilization to strengthen its relationship with customers.
 

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Chemours has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Chemours has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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