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Chemours' (CC) Q2 Earnings and Revenues Surpass Estimates

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The Chemours Company CC posted a profit of $66 million or 39 cents per share in the second quarter of 2021 compared with a profit of $24 million or 15 cents in the year-ago quarter, increasing 175%.

Adjusted earnings were $1.20 per share for the quarter, which surpassed the Zacks Consensus Estimate of 89 cents and increased from 18 cents in the prior-year quarter.

Net sales increased around 51% year over year to $1,655 million. The top line beat the Zacks Consensus Estimate of $1,513.9 million. An unfavorable 1% portfolio impact from the closure of the aniline business was more than counterbalanced by 46% volume growth, 2% higher pricing and 4% favorable currency translation.

Sales rose 15% on a sequential basis, as global macroeconomic recovery led to sales growth in all four segments.

Segment Highlights

The Titanium Technologies division logged in revenues of $859 million in the quarter, up 76% year over year. Volumes rose 66% year over year owing to strong demand in all regions and end markets.

Revenues in the Thermal & Specialized Solutions segment scaled up 47% year over year to $340 million in the reported quarter. Volumes increased 48% year over year, led by demand revival across all markets and regions. Moreover, the company witnessed higher Opteon adoption that drove the quarterly growth amid headwinds from constrained auto production due to the ongoing semiconductor chip shortages.

Revenues in the Advanced Performance Materials unit were $362 million, the highest quarterly segment net sales figure in the company’s history, which increased roughly 24% year over year. The increase in year-over-year sales was driven by demand recovery across nearly all end markets and regions, despite bottlenecks in logistics and availability of raw materials. Volume increase and price increase contributed 19% and 1%, respectively, to the strong year-over-year sales performance.

The Chemical Solutions unit recorded sales of $94 million, up 15% year over year. Volume increase and price increase contributed 26% and 6%, respectively, to the strong year-over-year sales performance, partly offset by portfolio changes. The company also witnessed a strong performance by Glycolic Acid and Mining solutions.

Financials

Chemours ended the quarter with cash and cash equivalents of $1,139 million, increasing 10.5% year over year. Long-term debt was $3,964 million, down 8.4% year over year.

Cash provided by operating activities was $256 million at the end of the second quarter, increasing 130.1% from $111 million in the prior-year quarter. Free cash flow for the second quarter was $189 million, increasing 278% from $50 million in the prior-year quarter.

Outlook

Chemours expects adjusted EBITDA and adjusted earnings for 2021 toward the higher end of its previously disclosed guidance ranges, owing to the strong second-quarter results and the ongoing business momentum.

Price Performance

Shares of Chemours have jumped 83% in the past year, outperforming the industry’s growth of 35.7%.

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Zacks Rank & Other Stocks to Consider

Currently, Chemours carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the basic materials space include Orion Engineered Carbons S.A OEC, LyondellBasell Industries N.V. LYB and Cabot Corporation CBT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Orion has a projected earnings growth rate of 79.8% for the current year. The company’s shares have grown 74% over a year.

LyondellBasell has a projected earnings growth rate of 222.6% for the current year. The company’s shares have risen 54% over a year.

Cabot has a projected earnings growth rate of 137.5% for the current year. The company’s shares have rallied 48.6% over a year.


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The Chemours Company (CC) : Free Stock Analysis Report

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