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Chemours (CC) Earnings and Revenues Surpass Estimates in Q3
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The Chemours Company (CC - Free Report) posted a profit of $214 million or $1.27 per share in the third quarter of 2021, up from a profit of $76 million or 46 cents in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of 99 cents.
Net sales increased around 36% year over year to $1,680 million. The top line beat the Zacks Consensus Estimate of $1,638 million. An unfavorable 1% portfolio impact from the exit of the aniline business was more than offset by 25% volume growth, 11% higher pricing and 1% favorable currency translation. Sales rose 2% on a sequential basis on strengthening pricing across the portfolio.
The Chemours Company Price, Consensus and EPS Surprise
The Titanium Technologies division logged in revenues of $908 million in the quarter, up around 48% year over year. Volumes rose 33% year over year owing to strong demand in all regions and end markets.
Revenues in the Thermal & Specialized Solutions segment scaled up 9% year over year to $318 million in the reported quarter. Volumes increased 1% year over year as strong demand in refrigerants across most regions was offset by constrained automotive demand. Moreover, the company witnessed Opteon adoption across all markets amid headwinds from semiconductor supply-chain disruptions that impacted automotive demand.
Revenues in the Advanced Performance Materials unit were $356 million, up roughly 48% year over year. The increase in year-over-year sales was driven by demand recovery across nearly all end markets and regions, despite raw material availability issues. Volume increase and price increase contributed 38% and 8%, respectively, to the year-over-year sales performance.
The Chemical Solutions unit recorded sales of $98 million, up 11% year over year. Volume increase and price increase contributed 14% and 15%, respectively, to the year-over-year sales performance, partly offset by portfolio changes. The company witnessed a strong performance in Glycolic Acid and Mining solutions.
Financials
Chemours ended the quarter with cash and cash equivalents of $1,031 million, increasing roughly 7.8% year over year. Long-term debt was $3,829 million, down around 5.8% year over year.
Cash provided by operating activities was $311 million for the third quarter. Free cash flow for the quarter was $244 million.
The company also bought back common stock worth $67 million during the quarter.
Outlook
Chemours raised its expectations for full-year 2021 on the back of its strong third-quarter performance. It now sees adjusted EBITDA within a range of $1,300-$1,340 million compared with the prior guidance in the top-end of $1,100-$1,250 million range.
The company also expects adjusted earnings per share in the band of $3.93-$4.13 compared with the prior guidance in the top-end of $2.84-$3.56 range.
Free cash flow for 2021 is now forecast to be more than $500 million, up from prior guidance of more than $450 million.
Price Performance
Shares of Chemours have gained 26.4% in the past year, outperforming the industry’s growth of 25.4%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Chemours carries a Zacks Rank #2 (Buy).
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Chemours (CC) Earnings and Revenues Surpass Estimates in Q3
The Chemours Company (CC - Free Report) posted a profit of $214 million or $1.27 per share in the third quarter of 2021, up from a profit of $76 million or 46 cents in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of 99 cents.
Net sales increased around 36% year over year to $1,680 million. The top line beat the Zacks Consensus Estimate of $1,638 million. An unfavorable 1% portfolio impact from the exit of the aniline business was more than offset by 25% volume growth, 11% higher pricing and 1% favorable currency translation. Sales rose 2% on a sequential basis on strengthening pricing across the portfolio.
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 logged in revenues of $908 million in the quarter, up around 48% year over year. Volumes rose 33% year over year owing to strong demand in all regions and end markets.
Revenues in the Thermal & Specialized Solutions segment scaled up 9% year over year to $318 million in the reported quarter. Volumes increased 1% year over year as strong demand in refrigerants across most regions was offset by constrained automotive demand. Moreover, the company witnessed Opteon adoption across all markets amid headwinds from semiconductor supply-chain disruptions that impacted automotive demand.
Revenues in the Advanced Performance Materials unit were $356 million, up roughly 48% year over year. The increase in year-over-year sales was driven by demand recovery across nearly all end markets and regions, despite raw material availability issues. Volume increase and price increase contributed 38% and 8%, respectively, to the year-over-year sales performance.
The Chemical Solutions unit recorded sales of $98 million, up 11% year over year. Volume increase and price increase contributed 14% and 15%, respectively, to the year-over-year sales performance, partly offset by portfolio changes. The company witnessed a strong performance in Glycolic Acid and Mining solutions.
Financials
Chemours ended the quarter with cash and cash equivalents of $1,031 million, increasing roughly 7.8% year over year. Long-term debt was $3,829 million, down around 5.8% year over year.
Cash provided by operating activities was $311 million for the third quarter. Free cash flow for the quarter was $244 million.
The company also bought back common stock worth $67 million during the quarter.
Outlook
Chemours raised its expectations for full-year 2021 on the back of its strong third-quarter performance. It now sees adjusted EBITDA within a range of $1,300-$1,340 million compared with the prior guidance in the top-end of $1,100-$1,250 million range.
The company also expects adjusted earnings per share in the band of $3.93-$4.13 compared with the prior guidance in the top-end of $2.84-$3.56 range.
Free cash flow for 2021 is now forecast to be more than $500 million, up from prior guidance of more than $450 million.
Price Performance
Shares of Chemours have gained 26.4% in the past year, outperforming the industry’s growth of 25.4%.
Zacks Rank & Stocks to Consider
Currently, Chemours carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) and Methanex Corporation (MEOH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien has an expected earnings growth rate of 181.7% for the current year. The stock has also rallied around 66% over a year.
Steel Dynamics has a projected earnings growth rate of 477.5% for the current year. The company’s shares have surged around 99% in a year.
Methanex has a projected earnings growth rate of 453.7% for the current year. The company’s shares have shot up around 53% in a year.