Yahoo Finance Chemours (CC) Q4 Earnings Beat, Revenue Miss Estimates
The Chemours Company CC reported a net loss of $18 million or 12 cents per share in fourth-quarter 2023 compared with the year-ago quarter's loss of $97 million or 65 cents.
Barring one-time items, earnings came in at 31 cents per share. It beat the Zacks Consensus Estimate of 29 cents.
In the fourth quarter, the company reported net sales of $1,361 million, reflecting a 1.7% increase compared to the previous year. However, it fell short of the Zacks Consensus Estimate of $1,370.5 million. The growth in sales was primarily attributed to a 7% rise in Titanium Technologies and a significant 17% increase in the Thermal & Specialized Solutions Segment. These gains were partially offset by a 15% decline in the Advanced Performance Materials unit.
Adjusted EBITDA surged by 47% year over year to reach $176 million for the quarter. This increase was primarily propelled by healthy demand within the Thermal & Specialized Solutions Segment, as well as lower input costs across CC’s businesses. Additionally, the implementation of the Titanium Technologies Transformation Plan contributed to operating expense savings, further enhancing the company’s profitability.
The Chemours Company Price, Consensus and EPS Surprise
The Chemours Company price-consensus-eps-surprise-chart | The Chemours Company Quote
Segment Highlights
The Titanium Technologies division recorded revenues of $651 million in the quarter, marking a 7% increase compared to the previous year. This surpassed our estimate of $624.2 million. The rise in net sales was fueled by a 12% surge in volume and a 1% currency tailwind, partially offset by a 6% decline in price. Increased demand across all regions except North America drove the volume growth, while contractual price increases partially mitigated price declines in market-exposed channels.
In the Thermal & Specialized Solutions segment, revenues saw a 17% year-over-year increase, reaching $374 million in the reported quarter, though it fell short of our estimate of $440 million. The boost in net sales was attributed to a 10% volume increase, a 6% price increase, and a 1% currency tailwind. Volume growth spanned across the portfolio, excluding legacy refrigerant products. At the same time, price increases were driven by pricing actions in legacy hydrofluorocarbons and various product portfolios, including Refrigerants and Foam, Propellants, and Other Products.
Revenues in the Advanced Performance Materials unit amounted to $325 million, marking a decline of approximately 15% year over year. Despite surpassing our estimate of $309.4 million, this decline was primarily driven by an 18% drop in volume, partially offset by a 2% increase in price, with a 1% currency tailwind. The decrease in volume was primarily attributed to soft demand in APM's Advanced Materials portfolio, which caters to economically sensitive end markets. However, the price increase was sustained by robust pricing in high-value end markets within APM's Performance Solutions portfolio, including advanced electronics and clean energy.
FY23 Results
For the full year 2023, Chemours reported net sales of $6,027 million, reflecting an 11% decline compared to the previous year. Adjusted Net Income stood at $425 million, a notable decrease from $738 million in the prior year. This resulted in an adjusted earnings per share of $2.82, down from $4.66 per share in the previous year. Adjusted EBITDA amounted to $1,014 million, compared to $1,361 million in the prior year.
Financials
Chemours ended the quarter with cash and cash equivalents of $1,203 million, up around 9% year over year. Long-term debt was $3,987 million, up nearly 11% year over year.
Cash provided by operating activities was $482 million in the reported quarter, up $321 million from the prior-year quarter.
Outlook
In the first quarter of 2024, the company forecasts that consolidated net sales will remain relatively stable or experience a slight decline compared to the previous quarter, while consolidated adjusted EBITDA is anticipated to decrease by approximately 10% compared with fourth-quarter 2023 levels. Operating cash flow is expected to see an outflow of about $400 million in the quarter, mainly due to seasonal fluctuations in working capital. In comparison, capital expenditures are projected to be around $100 million.
Price Performance
Shares of Chemours are down 3% in the past year compared with the industry’s fall of 6.6%.
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Zacks Rank & Other Key Picks
Chemours currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS and Ecolab Inc. ECL, each sporting a Zacks Rank #1 (Strong Buy), and Hawkins, Inc. HWKN, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $4 per share, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 12.2%. The company’s shares have increased 62.7% in the past year.
Ecolab has a projected earnings growth rate of 22.65% for the current year. The Zacks Consensus Estimate for ECL’s current-year earnings has been revised upward by 5.4% in the past 60 days. ECL topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied 42.9% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a 26% year-over-year rise. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have surged 77.3% in the past year.
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