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Chemours (CC) Earnings, Revenues Trump Estimates in Q2

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The Chemours Company (CC - Free Report) logged a profit of $281 million or $1.53 per share in the second quarter of 2018, up 75% year over year. Adjusted earnings for the quarter came in at $1.71 per share, which topped the Zacks Consensus Estimate of $1.53.

The company gained from continued adoption of Opteon refrigerant, sustained demand for fluoropolymers products and higher prices for Ti-Pure titanium dioxide.

Net sales of $1,816 million rose around 14% year over year and surpassed the Zacks Consensus Estimate of $1,802 million. The company saw higher volume across Fluoroproducts and Chemical Solutions segments. The top line was also driven by higher global average prices in Titanium Technologies and Fluoroproducts.

The company recorded adjusted EBITDA of $497 million for the quarter, up 38% year over year. The results were driven by higher sales, partly offset by increased distribution and raw material costs.

Chemours Company (The) Price, Consensus and EPS Surprise

 

Chemours Company (The) Price, Consensus and EPS Surprise

Chemours Company (The) price-consensus-eps-surprise-chart | Chemours Company (The) Quote

Segment Highlights

Revenues from the Fluoroproducts segment rose 13% year over year to $801 million. Gains in volumes on the back of sustained adoption of Opteon refrigerant and higher prices across all businesses boosted the division’s sales in the quarter.

The Chemical Solutions unit recorded revenues of $153 million, up 3% year over year. Sales rose as higher volumes driven by improved demand offset modestly lower pricing.

Revenues from the Titanium Technologies division climbed 18% year over year to $862 million. The company saw higher global average selling prices for Ti-Pure titanium dioxide products. Volumes fell modestly year over year.

Financials

Chemours ended the quarter with $1,217 million of cash and cash equivalents, down roughly 20% year over year. Long-term debt was $3,960 million, down around 2% year over year.
 
The company generated operating cash flow of $343 million in the quarter, up 86% year over year. Free cash flows for the quarter was around $217 million, up 89% from the year-ago quarter. Capital expenditures for the quarter were $126 million, up from $69 million a year ago.

Chemours’ board also authorized a $750 million share repurchase plan. Moreover, its board announced a quarterly cash dividend of 25 cents per share for the third quarter, a 47% increase from the previous payout of 17 cents per share.

Outlook

Based on its solid first-half results and visibility into the balance of 2018, Chemours expects that its adjusted EBITDA will be at the top end of its earlier announced range. Over the long term, the company remains confident in meeting or exceeding its three-year financial targets.  

Chemours also expects its capital expenditures for 2018 to be in the band of $475-$525 million.

Price Performance

Chemours has underperformed the industry it belongs to over a year. The company’s shares have lost around 5.4% over this period, compared with roughly 6% growth recorded by the industry.



 

Zacks Rank & Stocks to Consider

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

Better-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. , Ingevity Corporation (NGVT - Free Report) and Celanese Corporation (CE - Free Report) each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 40% over a year.

Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 64% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have shot up roughly 17% over a year.

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