Kronos Worldwide (KRO) Earnings and Sales Miss Estimates in Q2
Kronos Worldwide, Inc. KRO logged a loss of 7 cents per share in second-quarter 2023, against earnings of 40 cents in the year-ago quarter. It missed the Zacks Consensus Estimate of earnings of 10 cents.
The bottom line in the reported quarter was hurt by lower income from operations resulting from higher production costs and reduced sales volumes.
Net sales fell around 22% year over year to $443.2 million on reduced sales volumes in all major markets and modestly lower average titanium dioxide (TiO2) selling prices. The top line missed the Zacks Consensus Estimate of $527.7 million.
Kronos Worldwide Inc Price, Consensus and EPS Surprise
Kronos Worldwide Inc price-consensus-eps-surprise-chart | Kronos Worldwide Inc Quote
Volumes and Pricing
TiO2 production volumes (thousand metric tons) were down 33% year over year to 89 in the second quarter. It was below our estimate of 137.3. TiO2 sales volumes (thousand metric tons) fell 26% year over year to 104 in the quarter. It fell short of our estimate of 138.8.
TiO2 segment loss was $2.3 million in the reported quarter compared with segment profit of $69.5 million a year ago. The downside was driven by reduced income from operations on lower sales volumes and higher production costs.
Average TiO2 selling prices fell 2% year over year in the quarter.
Financials
Kronos Worldwide ended the quarter with cash and cash equivalents of $169.4 million, down roughly 5% sequentially. Long-term debt was $432.4 million, flat sequentially.
Outlook
Kronos said that it is witnessing strengthening demand, mainly in North America, entering second-half 2023. However, it expects near-term demand to remain lower than historical levels. Favorable pigment availability, modest order lead times and low-cost imports from China have led to increased pricing pressure.
KRO expects to report lower operating results for full-year 2023 on a year-over-year basis factoring in the weak demand recovery and higher production costs.
Price Performance
Shares of Kronos have lost 46.1% in the past year compared with a 10.4% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Kronos currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation CRS, PPG Industries, Inc. PPG and ATI Inc. ATI.
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.23, implying year-over-year growth of 183.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 69% in a year.
PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3% upward over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 10% in a year.
ATI currently carrying a Zacks Rank #2. It has a projected earnings growth rate of 13.1% for the current year.
ATI’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 52% in a year.
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