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

The Chemours Company CC is set to release third-quarter 2022 results after the bell on Oct 25. It is likely to have gained from higher customer adoption of the Opteon platform, favorable prices and cost actions. However, the company is expected to have faced headwinds from raw material cost inflation and ore constraints in the quarter.

The company beat the Zacks Consensus Estimate for earnings in three of the last four quarters, while missing once. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. The company posted an earnings surprise of 33.1% in the last reported quarter.

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

What Do Estimates Say?

The Zacks Consensus Estimate for Chemours’ third-quarter revenues is currently pegged at $1,771 million, suggesting an increase of around 5.4% on a year-over-year basis. Our estimate for the quarter is $1,790.6 million.

The Zacks Consensus Estimate for revenues for the Titanium Technologies division is pegged at $958 million, suggesting a rise of 5.5% year over year. Our estimate for the quarter is $939.8 million.

The consensus estimate for the Advanced Performance Materials unit is pinned at $388 million, reflecting a 9% year-over-year increase. Our estimate for the quarter is $426.3 million.

The Zacks Consensus Estimate for revenues for the Thermal & Specialized Solutions segment stands at $393 million, indicating a 23.6% year-over-year increase. Our estimate for the quarter is $395.1 million.

Some Factors at Play

Chemours’ Thermal & Specialized Solutions segment is likely to have benefited from strong demand for refrigerants across most regions in the third quarter. The company is also likely to have gained from the strong adoption of the Opteon platform in the quarter. It is witnessing higher demand for Opteon in mobile and stationary applications. Prices in the Titanium Technologies division are also likely to have been driven by strong demand for Ti-Pure pigment.

Chemours is also likely to have benefited from cost-management actions in the September quarter. The company’s cost, productivity and operational improvement actions across its businesses are likely to have supported margins. The company’s margins are also expected to have been supported by actions to raise prices for certain products.

However, Chemours is expected to have faced headwinds from global logistics and supply-chain issues. It is likely to have witnessed sustained raw material cost inflation in the third quarter due to supply constraints. The impacts of higher raw material, logistics and energy costs are likely to reflect on its performance in the quarter to be reported.

The company’s Titanium Technologies unit is also expected to have faced challenges from ore supply issues. Ore logistics constraints are likely to have impacted volumes in the third quarter.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Chemours this season. 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 -16.09%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $1.16. Our estimate for the quarter is $1.24. 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 That Warrant a Look

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

Albemarle Corporation ALB, scheduled to release earnings on Nov 2, has an Earnings ESP of +8.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.

Koppers Holdings Inc. KOP, expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.

The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.

FMC Corporation FMC, scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.

The Zacks Consensus Estimate for FMC' earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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