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Kronos Worldwide (KRO) Q2 Earnings Lag Estimates, Sales Beat

·4-min read

Kronos Worldwide, Inc. KRO logged profits of $45.9 million or 40 cents per share in second-quarter 2022, up from $25.7 million or 22 cents in the year-ago quarter. The figure missed the Zacks Consensus Estimate of 51 cents.

The bottom line in the reported quarter was driven by higher income from operations resulting from increased average titanium dioxide (TiO2) selling prices and favorable currency swings that offset higher production costs.

Net sales rose 18% year over year to $565.3 million, driven by higher average TiO2 selling prices. The top line surpassed the Zacks Consensus Estimate of $541.7 million.

 

Kronos Worldwide Inc Price, Consensus and EPS Surprise

 

Kronos Worldwide Inc Price, Consensus and EPS Surprise
Kronos Worldwide Inc Price, Consensus and EPS Surprise

Kronos Worldwide Inc price-consensus-eps-surprise-chart | Kronos Worldwide Inc Quote

 

Volumes and Pricing

TiO2 production volumes were down 4% year over year in the second quarter. TiO2 sales volumes fell 1% year over year.

TiO2 segment profit increased around 46% year over year to $69.5 million in the reported quarter. The upside was driven by a rise in average TiO2 selling prices, which were partly offset by increased production costs, including higher costs for raw materials and energy.

Average TiO2 selling prices rose 26% year over year in the quarter.

Financials

Kronos Worldwide ended the quarter with cash and cash equivalents of $371.2 million, up roughly 2% year over year. Long-term debt was $415.8 million, a roughly 12% year-over-year decline.

Outlook

Kronos expects the long-term outlook for its industry to remain positive. It will continue to monitor current and expected near-term customer demand levels and will align its production and inventories accordingly.

The company saw higher feedstock costs on a year-over-year basis in the first six months of 2022, and expects its feedstock costs to continue to rise moderately for the balance of 2022. High energy costs and availability concerns have contributed to further cost increases and the company expects the disruptions to global markets to continue for the foreseeable future. These disruptions and other global events could also lead to weaker demand for TiO2 in the second half of 2022, the company noted.

Price Performance

Shares of Kronos have gained 16.2% in the past year compared with a 9.8% fall of the industry.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. SQM, Albemarle Corporation ALB and Daqo New Energy Corp. DQ.

Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 91% in a year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle has a projected earnings growth rate of 231.4% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 3.6% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 2% in a year and currently carries a Zacks Rank #1.

Daqo New Energy, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 160.8% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current fiscal has been revised 13.5% upward in the past 60 days.

Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 15% over a year.


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