Kronos Worldwide Inc (KRO) Reports Q3 2023 Loss Amid Lower Sales Volumes and Prices
Kronos Worldwide Inc (NYSE:KRO) reports a net loss of $20.4 million in Q3 2023, compared to a net income of $21.0 million in Q3 2022.
Net sales for Q3 2023 were $396.9 million, a decrease of 14% from Q3 2022.
Net sales for the first nine months of 2023 were $1.3 billion, a decrease of 20% from the same period in 2022.
Lower sales volumes and lower average TiO2 selling prices were the primary contributors to the decrease in net income.
On November 2, 2023, Kronos Worldwide Inc (NYSE:KRO) released its Q3 2023 earnings report, revealing a net loss of $20.4 million, or $.18 per share. This is a significant downturn from Q3 2022, when the company reported a net income of $21.0 million, or $.18 per share. The decrease in net income is primarily attributed to lower income from operations due to reduced sales volumes and lower average TiO2 selling prices.
Financial Performance Overview
For the first nine months of 2023, Kronos Worldwide reported a net loss of $43.8 million, or $.38 per share, compared to a net income of $124.4 million, or $1.08 per share, in the same period of 2022. The company's operations were significantly impacted by reduced demand for certain products in all major markets and unabsorbed fixed production and other costs. Changes in currency exchange rates also affected the comparability of the company's results.
Net Sales Analysis
Net sales of $396.9 million in Q3 2023 were $62.7 million, or 14%, lower than in Q3 2022. For the first nine months of 2023, net sales were $1.3 billion, a decrease of $321.4 million, or 20%, from the same period in 2022. The decrease in net sales for both periods is attributed to lower sales volumes in all major markets and lower average TiO2 selling prices. However, changes in product mix and fluctuations in currency exchange rates somewhat offset these declines.
Segment Loss Analysis
The company's TiO2 segment reported a loss of $21.4 million in Q3 2023, compared to a profit of $34.6 million in Q3 2022. For the first nine months of 2023, the segment loss was $38.5 million, compared to a profit of $190.9 million in the same period of 2022. The decrease in segment profit is primarily due to lower income from operations resulting from lower sales volumes, higher production costs, and lower average TiO2 selling prices.
Outlook and Management Commentary
James M. Buch, President and Chief Executive Officer, commented on the results and outlook, stating,
This is clearly a historic downturn for the TiO2 industry. In response, we are focused on preserving liquidity by operating our plants at reduced rates to ensure inventory levels are aligned with near-term demand. We are beginning to see improved demand in certain markets and we believe low customer inventories and reduced capacity in the industry will fuel a return to profitability when demand returns to normal levels."
Explore the complete 8-K earnings release (here) from Kronos Worldwide Inc for further details.
This article first appeared on GuruFocus.
