We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kronos Worldwide, Inc. (KRO - Free Report) posted net income of $32.6 million or 28 cents per share in third-quarter 2018, down from $73.8 million or 64 cents in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of 59 cents.
Per the company, favorable impacts of higher average selling prices was more than offset by the unfavorable impact of lower production and sales volumes along with higher raw materials and other production costs.
Net sales went down around 12% year over year to $410.3 million due to the net effects of lower sales volumes and higher average TiO2 selling prices. The figure missed the Zacks Consensus Estimate of $467 million.
Kronos Worldwide Inc Price, Consensus and EPS Surprise
Average TiO2 selling prices rose 9% year over year in the quarter. The increase can be attributed to higher prices in the North American and European markets, which were partly offset by lower prices in the Latin American and export markets (due to changes in customer mix).
The company’s TiO2 sales volume fell 19% due to lower sales in the European and export markets. Per the company, this depicts the effects of reduced shipments as customer inventory levels returned to more normal levels.
Profit in the TiO2 segment was $61.7 million in the third quarter of 2018, down from $99.5 million in third-quarter 2017.
Balance Sheet
As of Sep 30, Kronos Worldwide had cash and cash equivalents of $432.3 million, surging 36.5% year over year from $316.7 million.
Long-term debt was $465.2 million, down from $467.5 million in the year-ago quarter. Cash flows from operating activities were $199 million for the first nine months compared with $218.3 million for the same period a year ago.
Outlook
Kronos Worldwide expects production volumes to fall in 2018 from the year-ago level. It also expects sales volumes for 2018 to be lower year over year. The company continues to believe that customer inventory level changes are short term and global demand remains solid. The company will continue to examine current and expected customer demand levels in the near term and align production and inventories accordingly.
It expects changes in customer inventory levels to continue decreasing through the fourth quarter, which may lead to fall in selling price.
It envisions net income in 2018 to be lower on a year-over-year basis, mainly due to the favorable impact of the aggregate net income tax benefits recognized in 2017.
Price Performance
Shares of Kronos Worldwide have lost 38.1% in the past three months compared with the industry’s 8.4% decline.
Zacks Rank & Key Picks
Kronos Worldwide currently has a Zacks Rank #5 (Strong Sell).
Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 28.1% in the past year.
CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 44% in a year.
Domtar has expected long-term earnings growth rate of 5%. Its shares have moved up 8% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Kronos Worldwide (KRO) Lags Q3 Earnings & Sales Estimates
Kronos Worldwide, Inc. (KRO - Free Report) posted net income of $32.6 million or 28 cents per share in third-quarter 2018, down from $73.8 million or 64 cents in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of 59 cents.
Per the company, favorable impacts of higher average selling prices was more than offset by the unfavorable impact of lower production and sales volumes along with higher raw materials and other production costs.
Net sales went down around 12% year over year to $410.3 million due to the net effects of lower sales volumes and higher average TiO2 selling prices. The figure missed the Zacks Consensus Estimate of $467 million.
Kronos Worldwide Inc Price, Consensus and EPS Surprise
Kronos Worldwide Inc Price, Consensus and EPS Surprise | Kronos Worldwide Inc Quote
Volumes and Pricing
Average TiO2 selling prices rose 9% year over year in the quarter. The increase can be attributed to higher prices in the North American and European markets, which were partly offset by lower prices in the Latin American and export markets (due to changes in customer mix).
The company’s TiO2 sales volume fell 19% due to lower sales in the European and export markets. Per the company, this depicts the effects of reduced shipments as customer inventory levels returned to more normal levels.
Profit in the TiO2 segment was $61.7 million in the third quarter of 2018, down from $99.5 million in third-quarter 2017.
Balance Sheet
As of Sep 30, Kronos Worldwide had cash and cash equivalents of $432.3 million, surging 36.5% year over year from $316.7 million.
Long-term debt was $465.2 million, down from $467.5 million in the year-ago quarter. Cash flows from operating activities were $199 million for the first nine months compared with $218.3 million for the same period a year ago.
Outlook
Kronos Worldwide expects production volumes to fall in 2018 from the year-ago level. It also expects sales volumes for 2018 to be lower year over year. The company continues to believe that customer inventory level changes are short term and global demand remains solid. The company will continue to examine current and expected customer demand levels in the near term and align production and inventories accordingly.
It expects changes in customer inventory levels to continue decreasing through the fourth quarter, which may lead to fall in selling price.
It envisions net income in 2018 to be lower on a year-over-year basis, mainly due to the favorable impact of the aggregate net income tax benefits recognized in 2017.
Price Performance
Shares of Kronos Worldwide have lost 38.1% in the past three months compared with the industry’s 8.4% decline.
Zacks Rank & Key Picks
Kronos Worldwide currently has a Zacks Rank #5 (Strong Sell).
A few better-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Domtar Corporation , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 28.1% in the past year.
CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 44% in a year.
Domtar has expected long-term earnings growth rate of 5%. Its shares have moved up 8% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>