Kronos Worldwide, Inc. (KRO - Free Report) logged profits of $21 million or 18 cents per share in third-quarter 2022, down from $36 million or 31 cents in the year-ago quarter. The figure missed the Zacks Consensus Estimate of 37 cents.
The bottom line in the reported quarter was hurt by lower income from operations resulting from higher production costs and reduced sales volumes, partly offset by increased average titanium dioxide (TiO2) selling prices.
Net sales fell 8% year over year to $459.6 million as reduced sales volumes in European, export and North American markets more than offset higher average TiO2 selling prices. The top line missed the Zacks Consensus Estimate of $516.2 million.
Volumes and Pricing
TiO2 production volumes were down 5% year over year in the third quarter. TiO2 sales volumes fell 20% year over year.
TiO2 segment profit declined around 43% year over year to $34.6 million in the reported quarter. The downside was driven by lower sales volumes and higher production costs, including raw material and energy costs. These were partly masked by higher average TiO2 selling prices.
Average TiO2 selling prices rose 21% year over year in the quarter.
Financials
Kronos Worldwide ended the quarter with cash and cash equivalents of $338.5 million, down roughly 9% year over year. Long-term debt was $390.9 million, a roughly 15% year-over-year decline.
Outlook
Kronos expects its sales volumes and operating results to be unfavorably impacted by the effects of reduced demand and increased costs in the near term.
The company has implemented production cuts at two of its European facilities during the fourth quarter in response to lower demand coupled with higher production costs, particularly in Europe. It will continue to monitor current and expected near-term customer demand levels and will align its production and inventories accordingly. KRO expects the long-term outlook for its industry to remain positive.
Price Performance
Shares of Kronos have lost 34.6% in the past year compared with a 9% fall of the industry.
Zacks Rank & Key Picks
Kronos Worldwide currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Commercial Metals Company (CMC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) .
Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 420.3% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 9% in a year.
Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 32% in a year.
Reliance Steel, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.
Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 21% in a year.
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Kronos Worldwide, Inc. (KRO - Free Report) logged profits of $21 million or 18 cents per share in third-quarter 2022, down from $36 million or 31 cents in the year-ago quarter. The figure missed the Zacks Consensus Estimate of 37 cents.
The bottom line in the reported quarter was hurt by lower income from operations resulting from higher production costs and reduced sales volumes, partly offset by increased average titanium dioxide (TiO2) selling prices.
Net sales fell 8% year over year to $459.6 million as reduced sales volumes in European, export and North American markets more than offset higher average TiO2 selling prices. The top line missed the Zacks Consensus Estimate of $516.2 million.
Volumes and Pricing
TiO2 production volumes were down 5% year over year in the third quarter. TiO2 sales volumes fell 20% year over year.
TiO2 segment profit declined around 43% year over year to $34.6 million in the reported quarter. The downside was driven by lower sales volumes and higher production costs, including raw material and energy costs. These were partly masked by higher average TiO2 selling prices.
Average TiO2 selling prices rose 21% year over year in the quarter.
Financials
Kronos Worldwide ended the quarter with cash and cash equivalents of $338.5 million, down roughly 9% year over year. Long-term debt was $390.9 million, a roughly 15% year-over-year decline.
Outlook
Kronos expects its sales volumes and operating results to be unfavorably impacted by the effects of reduced demand and increased costs in the near term.
The company has implemented production cuts at two of its European facilities during the fourth quarter in response to lower demand coupled with higher production costs, particularly in Europe. It will continue to monitor current and expected near-term customer demand levels and will align its production and inventories accordingly. KRO expects the long-term outlook for its industry to remain positive.
Price Performance
Shares of Kronos have lost 34.6% in the past year compared with a 9% fall of the industry.
Zacks Rank & Key Picks
Kronos Worldwide currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Commercial Metals Company (CMC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) .
Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 420.3% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 9% in a year.
Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 32% in a year.
Reliance Steel, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.
Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 21% in a year.
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Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
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