Kronos Worldwide, Inc. (KRO - Free Report) recorded profit of $30.3 million or 26 cents per share in first-quarter 2019, down around 57% from $70.7 million or 61 cents in the year-ago quarter. Earnings per share, however, topped the Zacks Consensus Estimate of 24 cents.
Results in the reported quarter were impacted by lower average selling prices as well as increased raw materials and other production costs that more than offset higher sales and production volumes.
Net sales edged up 1% year over year to $436.5 million as higher sales volumes offset reduced average titanium dioxide (TiO2) selling prices. The figure also beat the Zacks Consensus Estimate of $398.3 million.
Volumes and Pricing
Average TiO2 selling prices fell 8% year over year in the reported quarter. Average selling prices at the end of the quarter were down 4% year over year. Lower prices in European, Latin American and North American markets were, in part, offset by higher prices in the export market.
The company’s TiO2 sales volume rose 15% year over year as a result of higher sales across all key markets. TiO2 production volumes edged up 1% year over year in the quarter.
Profit in the TiO2 segment was $53.3 million in the reported quarter, down 61% from $111.8 million a year ago. The decline reflects lower TiO2 selling prices and increased raw materials and other production costs that more than offset increased sales and production volumes.
Balance Sheet
Kronos Worldwide ended the quarter with cash and cash equivalents of $339.5 million, down 7% year over year. Long-term debt was $445.8 million, down around 9% year over year.
Cash flows from operating activities were $7 million for the quarter, down 88% from $58.2 million a year ago.
Outlook
Moving ahead, Kronos Worldwide expects its production volumes to be modestly higher year over year in 2019. The company also envisions its sales volumes for 2019 to be higher year over year based on expected production levels and assuming current global economic conditions to remain stable. The company will continue to examine current and expected customer demand levels in the near term and align production and inventories accordingly.
The company expects its sales to be higher year over year in 2019, mainly due to higher expected sales volumes, partly offset by lower expected average selling prices.
Moreover, Kronos Worldwide expects its income from operations to be lower year over year in 2019 as benefits of higher expected sales volumes are expected to be more than offset by lower expected average selling prices and higher raw material costs.
Price Performance
Shares of Kronos Worldwide have lost 43.4% over a year, underperforming the 30% decline recorded by its industry.
Zacks Rank and Stocks to Consider
Kronos Worldwide currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include AngloGold Ashanti Limited (AU - Free Report) , Flexible Solutions International Inc. (FSI - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have shot up around 27% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 104% in the past year.
Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have gained around 25% in the past year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Kronos Worldwide, Inc. (KRO - Free Report) recorded profit of $30.3 million or 26 cents per share in first-quarter 2019, down around 57% from $70.7 million or 61 cents in the year-ago quarter. Earnings per share, however, topped the Zacks Consensus Estimate of 24 cents.
Results in the reported quarter were impacted by lower average selling prices as well as increased raw materials and other production costs that more than offset higher sales and production volumes.
Net sales edged up 1% year over year to $436.5 million as higher sales volumes offset reduced average titanium dioxide (TiO2) selling prices. The figure also beat the Zacks Consensus Estimate of $398.3 million.
Volumes and Pricing
Average TiO2 selling prices fell 8% year over year in the reported quarter. Average selling prices at the end of the quarter were down 4% year over year. Lower prices in European, Latin American and North American markets were, in part, offset by higher prices in the export market.
The company’s TiO2 sales volume rose 15% year over year as a result of higher sales across all key markets. TiO2 production volumes edged up 1% year over year in the quarter.
Profit in the TiO2 segment was $53.3 million in the reported quarter, down 61% from $111.8 million a year ago. The decline reflects lower TiO2 selling prices and increased raw materials and other production costs that more than offset increased sales and production volumes.
Balance Sheet
Kronos Worldwide ended the quarter with cash and cash equivalents of $339.5 million, down 7% year over year. Long-term debt was $445.8 million, down around 9% year over year.
Cash flows from operating activities were $7 million for the quarter, down 88% from $58.2 million a year ago.
Outlook
Moving ahead, Kronos Worldwide expects its production volumes to be modestly higher year over year in 2019. The company also envisions its sales volumes for 2019 to be higher year over year based on expected production levels and assuming current global economic conditions to remain stable. The company will continue to examine current and expected customer demand levels in the near term and align production and inventories accordingly.
The company expects its sales to be higher year over year in 2019, mainly due to higher expected sales volumes, partly offset by lower expected average selling prices.
Moreover, Kronos Worldwide expects its income from operations to be lower year over year in 2019 as benefits of higher expected sales volumes are expected to be more than offset by lower expected average selling prices and higher raw material costs.
Price Performance
Shares of Kronos Worldwide have lost 43.4% over a year, underperforming the 30% decline recorded by its industry.
Zacks Rank and Stocks to Consider
Kronos Worldwide currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include AngloGold Ashanti Limited (AU - Free Report) , Flexible Solutions International Inc. (FSI - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have shot up around 27% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 104% in the past year.
Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have gained around 25% in the past year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on APD - FREE
Get the latest research report on AU - FREE
Get the latest research report on KRO - FREE
Get the latest research report on FSI - FREE