It has been about a month since the last earnings report for Kronos Worldwide (KRO - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kronos Worldwide due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Kronos Worldwide’s Q1 Earnings & Sales Top Estimates
Kronos Worldwide 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 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.
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.
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.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
At this time, Kronos Worldwide has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Kronos Worldwide has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.