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Chemours (CC) to Post Q3 Earnings: What's in the Offing?

Zacks Equity Research

The Chemours Company CC is scheduled to release its third-quarter 2019 results after the bell on Nov 4. The company is likely to have faced some volume pressure in its Titanium Technologies segment in the quarter. Moreover, results in the Fluoroproducts unit are expected to reflect the impact of illegal imports. However, the company is likely to have benefited from continued customer adoption of Opteon refrigerants and its productivity actions.

Chemours missed the Zacks Consensus Estimate for earnings in two of the trailing four quarters while beat once and delivered in-line results on the other occasion. In this timeframe, the company delivered an average negative surprise of around 11.1%.

Chemours’ shares are down around 41.2% year to date, underperforming the industry’s decline of roughly 20.1%.


Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for the third quarter for Chemours is currently pegged at $1,393 million, reflecting an expected decline of roughly 14.5% on a year over year basis.

Revenues in the Fluoroproducts segment are projected to decline 5% year over year as the Zacks Consensus Estimate for the third quarter is pegged at $648 million.

Moreover, the Zacks Consensus Estimate for revenues for the Chemical Solutions unit for the third quarter stands at $160 million, which reflects an expected 3.2% increase from the prior-year quarter.

Revenues from the Titanium Technologies division are expected to decline 26.7% year over year as the Zacks Consensus Estimate is pegged at $580 million.

Some Factors at Play

Lower volumes are likely to have hurt third-quarter sales in the company’s Titanium Technologies segment. Chemours is seeing pressure on Ti-Pure TiO2 (titanium dioxide) pigment volumes. The company witnessed lower volumes for these products through the first half of 2019 due to weak demand (especially in Europe). The trend is likely to have continued in the third quarter amid a challenging macroeconomic environment.

The company is also facing challenges from illegal imports of HFC refrigerants into the European Union from China. These illegal imports are hurting pricing and volumes of refrigerants. Lower industrial demand, partly due to weakness in the global automotive industry, is also affecting fluoropolymer volumes. These headwinds might reflect on sales in the Fluoroproducts unit in the third quarter.

Nevertheless, the company is expected to have benefited from increasing adoption of Opteon refrigerants in the September quarter. Chemours is seeing strong adoption of Opteon for mobile applications. Benefits of the company’s actions to manage costs and drive productivity are also expected to get reflected on third-quarter results.

The Chemours Company Price and EPS Surprise


The Chemours Company Price and EPS Surprise

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

Zacks Model

Our proven model does not conclusively predict that Chemours is likely to beat the Zacks Consensus Estimate this quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Chemours is +12.00%. The Most Accurate Estimate for the third quarter is currently pegged at 63 cents while the Zacks Consensus Estimate stands at 56 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Chemours carries a Zacks Rank #5 (Strong Sell).  

Stocks to Consider

Here are some companies in the basic materials space that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Kinross Gold Corporation KGC, scheduled to release earnings on Nov 6, has an Earnings ESP of +2.50% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

LyondellBasell Industries N.V. LYB scheduled to release earnings on Nov 1, has an Earnings ESP of +1.26% and carries a Zacks Rank #3.

Arconic Inc. ARNC, scheduled to release earnings on Nov 5, has an Earnings ESP of +1.42% and carries a Zacks Rank #3.

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