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Chemours (CC) to Post Q4 Earnings: What's in the Cards?

Zacks Equity Research

The Chemours Company CC is set to release fourth-quarter 2019 results after the bell on Feb 13. Results in the company’s Fluoroproducts unit are expected to reflect the impacts of illegal imports and soft demand. The company is also likely to have faced some volume pressure in its Titanium Technologies unit in the quarter. However, Chemours is likely to have benefited from 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 a negative surprise of around 11.7%, on an average.

Chemours’ shares are down 63.4% over a year, underperforming the industry’s decline of 27.1%.



What do the Estimates Say?

The Zacks Consensus Estimate for revenues for the fourth quarter for Chemours is currently pegged at $1,370 million, reflecting an expected decline of roughly 6.4% on a year over year basis.

The Zacks Consensus Estimate for revenues for the Fluoroproducts segment for the fourth quarter is pegged at $606 million, indicating a decline of 6.6% year over year.

Moreover, the Zacks Consensus Estimate for revenues for the Chemical Solutions unit stands at $153 million, which reflects an expected 2.7% increase from the prior-year quarter.

The Zacks Consensus Estimate for the Titanium Technologies division is pegged at $608 million, indicating a decline of 8.7% year over year.

Some Factors at Play

Lower volumes are likely to have hurt fourth-quarter sales in the 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 as well as in the third quarter due to weak demand. The trend is likely to have continued in the fourth quarter amid a challenging macroeconomic environment.

Chemours is also facing headwinds from illegal imports of HFC refrigerants into the European Union from China. These illegal imports are hurting pricing and volumes of refrigerants. Softer industrial demand, partly due to weakness in automotive and electronics industries, is also affecting the company’s Fluoroproducts unit. These challenges might reflect on sales in this segment in the December quarter.

Nevertheless, the company is expected to have benefited from sustained adoption of Opteon refrigerants in the fourth 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 fourth-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 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 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both currently pegged at 43 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 #4 (Sell).

Stocks to Consider

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

Bunge Limited BG, scheduled to release earnings on Feb 12, has an Earnings ESP of +18.18% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cleveland-Cliffs Inc. CLF, scheduled to release earnings on Feb 20, has an Earnings ESP of +29.17% and carries a Zacks Rank #3.

AK Steel Holding Corporation AKS, scheduled to release earnings on Feb 20, has an Earnings ESP of +11.11% and carries a Zacks Rank #3.

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The Chemours Company (CC) : Free Stock Analysis Report
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