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Kronos Worldwide (KRO) Earnings and Sales Miss Estimates in Q4
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Kronos Worldwide, Inc. (KRO - Free Report) logged a loss of $19.9 million or 18 cents per share in fourth-quarter 2022, against a profit of $31.6 million or 28 cents in the year-ago quarter. The loss per share figure was wider than the Zacks Consensus Estimate of a loss of 2 cents.
The bottom line in the reported quarter was hurt by lower income from operations resulting from higher production costs and reduced sales volumes, partly offset by increased average titanium dioxide (TiO2) selling prices.
Net sales fell 31% year over year to $342.4 million as reduced sales volumes in all markets more than offset higher average TiO2 selling prices. The top line missed the Zacks Consensus Estimate of $343.5 million.
Kronos Worldwide Inc Price, Consensus and EPS Surprise
TiO2 production volumes were down 35% year over year in the fourth quarter. TiO2 sales volumes fell 40% year over year.
TiO2 segment loss was $15 million in the reported quarter compared with segment profit of $55.6 million a year ago. The downside was driven by lower sales volumes and higher production costs, including raw material and energy costs. These were partly offset by higher average TiO2 selling prices.
Average TiO2 selling prices rose 15% year over year in the quarter.
FY22 Results
Earnings or full-year 2022 were 90 cents per share compared with 98 cents per share a year ago. Revenues were $1,930.2 million for the full year, down around 0.5% year over year.
Financials
Kronos Worldwide ended 2022 with cash and cash equivalents of $327.8 million, down roughly 19% year over year. Long-term debt was $424.1 million, a roughly 6% year-over-year decline.
Outlook
Kronos said that it is seeing improving demand in Europe and certain export markets driven by customer inventory replenishment following significant destocking in the fourth quarter 2022. However, it is witnessing sustained soft demand in North America in the first quarter of 2023. The company anticipates customer demand to gradually return during the first half of 2023, especially in Europe and export markets.
At the beginning of 2023, KRO started a measured ramp up of production with the expectation of operating its facilities at full practical capacity by the end of the second quarter. While its selling prices remained stable at the beginning of 2023, the company expects prices to rise throughout the final three quarters of 2023 in response to increased production costs. Considering these factors, the company expects lower operating results for full-year 2023 on a year-over-year basis.
Price Performance
Shares of Kronos have lost 25.9% in the past year compared with a 12.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Kronos Worldwide currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 20.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 84% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 60.6% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 82% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 10.7% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 33% in the past year.
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Kronos Worldwide (KRO) Earnings and Sales Miss Estimates in Q4
Kronos Worldwide, Inc. (KRO - Free Report) logged a loss of $19.9 million or 18 cents per share in fourth-quarter 2022, against a profit of $31.6 million or 28 cents in the year-ago quarter. The loss per share figure was wider than the Zacks Consensus Estimate of a loss of 2 cents.
The bottom line in the reported quarter was hurt by lower income from operations resulting from higher production costs and reduced sales volumes, partly offset by increased average titanium dioxide (TiO2) selling prices.
Net sales fell 31% year over year to $342.4 million as reduced sales volumes in all markets more than offset higher average TiO2 selling prices. The top line missed the Zacks Consensus Estimate of $343.5 million.
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 35% year over year in the fourth quarter. TiO2 sales volumes fell 40% year over year.
TiO2 segment loss was $15 million in the reported quarter compared with segment profit of $55.6 million a year ago. The downside was driven by lower sales volumes and higher production costs, including raw material and energy costs. These were partly offset by higher average TiO2 selling prices.
Average TiO2 selling prices rose 15% year over year in the quarter.
FY22 Results
Earnings or full-year 2022 were 90 cents per share compared with 98 cents per share a year ago. Revenues were $1,930.2 million for the full year, down around 0.5% year over year.
Financials
Kronos Worldwide ended 2022 with cash and cash equivalents of $327.8 million, down roughly 19% year over year. Long-term debt was $424.1 million, a roughly 6% year-over-year decline.
Outlook
Kronos said that it is seeing improving demand in Europe and certain export markets driven by customer inventory replenishment following significant destocking in the fourth quarter 2022. However, it is witnessing sustained soft demand in North America in the first quarter of 2023. The company anticipates customer demand to gradually return during the first half of 2023, especially in Europe and export markets.
At the beginning of 2023, KRO started a measured ramp up of production with the expectation of operating its facilities at full practical capacity by the end of the second quarter. While its selling prices remained stable at the beginning of 2023, the company expects prices to rise throughout the final three quarters of 2023 in response to increased production costs. Considering these factors, the company expects lower operating results for full-year 2023 on a year-over-year basis.
Price Performance
Shares of Kronos have lost 25.9% in the past year compared with a 12.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Kronos Worldwide currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 20.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 84% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 60.6% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 82% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 10.7% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 33% in the past year.