Kronos Worldwide, Inc. (KRO - Free Report) incurred a loss of 18 cents per share in third-quarter 2023 against a profit of 18 cents in the year-ago quarter. The Zacks Consensus Estimate was of earnings of 3 cents per share. The decline in the bottom line was primarily due to lower sales volumes and average titanium dioxide (TiO2) selling prices.
Net sales fell around 13.6% year over year to $396.9 million on reduced sales volumes in all major markets and lower average TiO2 selling prices. The top line missed the Zacks Consensus Estimate of $428.7 million.
Volumes and Pricing
TiO2 production volumes (thousand metric tons) decli 22.1% year over year to 102 in the third quarter. TiO2 sales volumes (thousand metric tons) fell 6% year over year to 107 in the quarter.
TiO2 segment loss was $21.4 million in the reported quarter against segment profit of $34.6 million a year ago. The downside was due to reduced income from operations on lower sales volumes and prices.
Average TiO2 selling prices fell 8% year over year in the quarter.
Financials
Kronos ended the quarter with cash and cash equivalents of $155.3 million, down roughly 54.1% year over year. Long-term debt was $422.5 million, down 0.4% year over year.
Outlook
The company believes that customer destocking is complete and customer inventories are historically low. However, customers' near-term outlook remains uncertain, and the company anticipates production curtailments by certain customers during the fourth quarter in response to expected low downstream demand, particularly in Europe. Outside of Europe, demand has leveled in several regions, especially in North America, far below historical averages.
The company expects near-term demand to remain below historical norms, and it is managing production levels to end the year with a low finished goods inventory level. The company feels the industry's long-term prognosis remains favorable, and the steps it has taken allow it to rapidly change production rates while maintaining its competitive position.
Price Performance
Shares of Kronos have lost 23.7% in the past year compared with a 12.3% decline in the industry.
Zacks Rank & Key Picks
Kronos currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Equinox Gold Corp. (EQX - Free Report) , Koppers Holdings Inc. (KOP - Free Report) and The Andersons Inc. (ANDE - Free Report) .
Equinox has a projected earnings growth rate of 90% for the current year. It currently carries a Zacks Rank #2 (Buy). Equinox delivered a trailing four-quarter earnings surprise of roughly 18.1%, on average. The stock is up around 79.8% in a year. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Koppers has a projected earnings growth rate of 7.5% for the current year. It currently carries a Zacks Rank #2. Koppers delivered a trailing four-quarter earnings surprise of roughly 21.7%, on average. The stock is up around 54.9% in a year.
Andersons currently carries a Zacks Rank #1. The stock has gained roughly 41.6% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
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Kronos Worldwide, Inc. (KRO - Free Report) incurred a loss of 18 cents per share in third-quarter 2023 against a profit of 18 cents in the year-ago quarter. The Zacks Consensus Estimate was of earnings of 3 cents per share. The decline in the bottom line was primarily due to lower sales volumes and average titanium dioxide (TiO2) selling prices.
Net sales fell around 13.6% year over year to $396.9 million on reduced sales volumes in all major markets and lower average TiO2 selling prices. The top line missed the Zacks Consensus Estimate of $428.7 million.
Volumes and Pricing
TiO2 production volumes (thousand metric tons) decli 22.1% year over year to 102 in the third quarter. TiO2 sales volumes (thousand metric tons) fell 6% year over year to 107 in the quarter.
TiO2 segment loss was $21.4 million in the reported quarter against segment profit of $34.6 million a year ago. The downside was due to reduced income from operations on lower sales volumes and prices.
Average TiO2 selling prices fell 8% year over year in the quarter.
Financials
Kronos ended the quarter with cash and cash equivalents of $155.3 million, down roughly 54.1% year over year. Long-term debt was $422.5 million, down 0.4% year over year.
Outlook
The company believes that customer destocking is complete and customer inventories are historically low. However, customers' near-term outlook remains uncertain, and the company anticipates production curtailments by certain customers during the fourth quarter in response to expected low downstream demand, particularly in Europe. Outside of Europe, demand has leveled in several regions, especially in North America, far below historical averages.
The company expects near-term demand to remain below historical norms, and it is managing production levels to end the year with a low finished goods inventory level. The company feels the industry's long-term prognosis remains favorable, and the steps it has taken allow it to rapidly change production rates while maintaining its competitive position.
Price Performance
Shares of Kronos have lost 23.7% in the past year compared with a 12.3% decline in the industry.
Zacks Rank & Key Picks
Kronos currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Equinox Gold Corp. (EQX - Free Report) , Koppers Holdings Inc. (KOP - Free Report) and The Andersons Inc. (ANDE - Free Report) .
Equinox has a projected earnings growth rate of 90% for the current year. It currently carries a Zacks Rank #2 (Buy). Equinox delivered a trailing four-quarter earnings surprise of roughly 18.1%, on average. The stock is up around 79.8% in a year. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Koppers has a projected earnings growth rate of 7.5% for the current year. It currently carries a Zacks Rank #2. Koppers delivered a trailing four-quarter earnings surprise of roughly 21.7%, on average. The stock is up around 54.9% in a year.
Andersons currently carries a Zacks Rank #1. The stock has gained roughly 41.6% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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