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Tronox (TROX) Q1 Earnings Beat Estimates, Revenues In Line

Zacks Equity Research

Tronox Holdings plc TROX recorded profits (attributable to the company) of $32 million or 22 cents per share in first-quarter 2020 against a loss of $34 million or 27 cents per share a year ago.

Barring one-time items, adjusted earnings per share for the reported quarter were 29 cents, which surpassed the Zacks Consensus Estimate of 23 cents.

Revenues surged around 85% year over year to $722 million in the reported quarter, matching the Zacks Consensus Estimate. The upside can be attributed to higher titanium dioxide (TiO2) sales.

Product Revenues

TiO2 sales shot up 109% year over year to $580 million. Sales included contributions from the acquired operations of Cristal.

Zircon sales rose 2% to $65 million in the reported quarter. Sales include revenues from the Cristal operations.

Feedstock and other products’ sales climbed 57% to $77 million, boosted by Cristal operations.

Financials

The company ended the quarter with cash and cash equivalents of $420 million, down around 61% year over year. Long-term debt was $2,954 million, down roughly 8% year over year. The company has no near-term maturities on its term loan or notes until 2024.

Outlook

The company currently expects TiO2 volumes to decline in the high teens to low 20s percent range on a sequential comparison basis in second-quarter 2020. Zircon volumes are forecast to remain largely in line with first-quarter 2020.

Tronox also reduced its capital expenditures for full-year 2020 to $225 million from $275 million as well as working capital to $40-$50 million from $75-$100 million.

Price Performance

Shares of Tronox have lost 31.9% over a year, compared with the industry’s 24.4% decline.



 

 

Zacks Rank & Key Picks

Tronox currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space are The Scotts Miracle-Gro Company SMG, Franco-Nevada Corporation FNV and Newmont Corporation NEM.

Scotts Miracle-Gro has an expected earnings growth rate of 17.7% for the current fiscal year. The company’s shares have gained roughly 60% in the past year. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Franco-Nevada has a projected earnings growth rate of 22% for the current year. It currently carries a Zacks Rank #2. The company’s shares have surged roughly 89% in a year.

Newmont has a projected earnings growth rate of 85.6% for the current year. The company’s shares have rallied around 109% in a year. It currently has a Zacks Rank #2.

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