Kronos Worldwide, Inc. (KRO - Free Report) recorded net income of $196.5 million or $1.70 per share in second-quarter 2017, compared with net income of $1.7 million or a penny per share a year ago.
Higher income from operations resulting from favorable impacts of improved selling prices, increased sales and production volumes and reduced raw materials and other production costs provided a boost to Kronos Worldwide’s second-quarter performance.
Barring one-time items, adjusted earnings were 34 cents per share in the reported quarter, which missed the Zacks Consensus Estimate of 42 cents.
Net revenues jumped around 23.9% year-over-year to $441.4 million, on the back of higher titanium dioxide (TiO2) selling prices and increased sales volumes.
Volumes and Pricing
TiO2 sales volumes in second quarter rose 6% year over year on increased sales in the European and North American markets, partly offset by decreased sales in the Latin American market.
TiO2 production volumes increased 8% year over year in the quarter and average TiO2 selling prices went up about 20% year over year in the reported quarter. Prices were also 12% higher compared with the end of 2016 with higher prices recorded across all key markets.
Kronos Worldwide ended the quarter with cash and cash equivalents of $114.1 million, up around 44.1% year over year. Long-term debt was $350.8 million, up around 4.2% year over year. Cash flows from operating activities were $101.6 million for first-half 2017 compared with $16.6 million for the same period a year ago.
Kronos Worldwide expects its production volumes to be modestly higher in 2017 on a year-over-year basis as production rates this year will be favorably impacted by the implementation of certain productivity-enhancing improvement projects at some facilities.
The company also envisions income from operations in 2017 will be higher on a year-over-year basis, mainly due to an expected increase in average selling prices and the favorable impact of anticipated higher production volumes in 2017.
Shares of Kronos Worldwide have gained 40.3% in last six months, significantly outperforming the industry’s 7% gain.
Zacks Rank & Other Key Picks
Kronos Worldwide currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the basic materials space are POSCO (PKX - Free Report) , The Chemours Company (CC - Free Report) and Akzo Nobel NV (AKZOY - Free Report) . All three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.
POSCO has expected long-term earnings growth rate of 5%.
Chemours has expected long-term earnings growth rate of 15.5%.
Akzo Nobel has expected long-term earnings growth rate of 11.1%.
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