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Chemours' (CC) Earnings and Revenues Miss Estimates in Q2

Zacks Equity Research

The Chemours Company CC logged profits of $96 million or 57 cents per share in the second quarter of 2019, down roughly 66% from a profit of $281 million or $1.53 a year ago. The results in the reported quarter include a $7 million charge associated with the company's Fayetteville facility.

Adjusted earnings were 72 cents per share for the quarter, which fell short of the Zacks Consensus Estimate of 90 cents.

Net sales fell around 22% year over year to $1,408 million, hurt by lower volumes in the company’s Titanium Technologies unit. The company saw weak demand for Ti-Pure TiO2 (titanium dioxide) pigment. Revenues trailed the Zacks Consensus Estimate of $1,530 million.

The Chemours Company Price, Consensus and EPS Surprise

 

The Chemours Company Price, Consensus and EPS Surprise

The Chemours Company price-consensus-eps-surprise-chart | The Chemours Company Quote

Segment Highlights

Revenues in the Fluoroproducts segment fell 11% year over year to $ $711 million in the reported quarter, impacted by lower volumes. Higher demand for Opteon refrigerants was more than offset by Illegal imports of HFC refrigerants into the European Union and weaker demand for base refrigerants in North America.

Revenues in the Chemical Solutions unit were $130 million, down 15% year over year. Volumes fell due to lower sales in Performance Chemicals and Intermediates, and in Mining Solutions due to operational issues. The company saw higher prices in the quarter.
 
Revenues in the Titanium Technologies division were $567 million, down around 34% from the prior-year quarter. The decline is attributable to lower volumes of Ti-Pure TiO2.

Financials

Chemours ended the quarter with cash and cash equivalents of $630 million, down roughly 48% year over year. Long-term debt was $4,190 million, up around 6% year over year.
 
Chemours returned $108 million to shareholders through share buybacks and dividends in the quarter.

Outlook

Chemours lowered its earnings guidance for 2019 factoring in the weak second-quarter performance and increasing macro-economic uncertainties. It now expects adjusted EBITDA in the range of $1-$1.15 billion for 2019. The company also sees adjusted earnings of between $2.37 and $3.08 per share for the year.

Capital expenditures are forecast to be around $500 million for 2019. The company also expects free cash flow of around $100 million for the year.  

Price Performance

Chemours’ shares have lost around 35.6% year to date, underperforming the roughly 19.8% decline recorded by its industry.



 

Zacks Rank & Key Picks

Chemours currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks worth considering in the basic materials space include Arconic Inc. ARNC, Kinross Gold Corporation KGC and Flexible Solutions International Inc FSI.

Arconic has an estimated earnings growth rate of 38.2% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have moved up 15% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has projected earnings growth rate of 100% for the current year and carries a Zacks Rank #1. The company’s shares have gained 30.3% in a year’s time.

Flexible Solutions has an expected earnings growth rate of 342.9% for the current fiscal year and carries Zacks Rank #2 (Buy). Its shares have surged around 111% in the past year.

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