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Chemours (CC) Q4 Earnings In Line, Revenues Trail Estimates

Anindya Barman

The Chemours Company CC logged profits of $142 million or 81 cents per share in the fourth quarter of 2018, down roughly 38% from a profit of $228 million or $1.19 a year ago. The results in the reported quarter include a $33 million charge associated with the company's Fayetteville, NC, site.

Adjusted earnings came in at $1.05 per share for the quarter, which matched the Zacks Consensus Estimate.

Net sales fell around 7% year over year to $1,464 million. Lower volumes in the company’s Titanium Technologies unit more than offset higher global average prices across all segments. Revenues trailed the Zacks Consensus Estimate of $1,547.2 million.

The company recorded adjusted EBITDA of $341 million in the quarter, down 13% year over year. The results were hurt by reduced volumes and increased raw material costs.

The Chemours Company Price, Consensus and EPS Surprise

The Chemours Company Price, Consensus and EPS Surprise | The Chemours Company Quote

FY18 Results

For 2018, profit was $995 million or $5.45 per share, up roughly 33% from $746 million or $3.91 per share recorded in 2017.

Net sales for the year went up around 7% year over year to $6,638 million, aided by increased selling prices.

Segment Highlights

Revenues in the Fluoroproducts segment fell 1% year over year to $649 million in the fourth quarter. Higher demand for Opteon refrigerants was offset by reduced demand for base refrigerants and the impact of supply constraints in fluoropolymers.

Revenues in the Chemical Solutions unit were $149 million, up 11% year over year. Increased demand for Mining Solutions products was offset by reduced volumes in Performance Chemicals & Intermediates. The company also saw higher prices across the segment.

Revenues in the Titanium Technologies division were $666 million, down around 15% from the prior-year quarter. The decline is attributable to lower volumes of Ti-Pure titanium dioxide.

Financials

Chemours ended 2018 with cash and cash equivalents of $1,201 million, down roughly 23% year over year. Long-term debt was $3,959 million, down around 3% year over year.

The company generated operating cash flow of $259 million in the fourth quarter and $1.1 billion in 2018. Free cash flows for the quarter was $105 million and $642 million for full-year 2018. Capital expenditures were $154 million for the fourth quarter and $498 million for full-year 2018.

Chemours returned more than $790 million to shareholders through share repurchases and dividends in 2018.

Outlook

Chemours expects adjusted EBITDA for 2019 within $1.35-$1.6 billion. Capital expenditures for the year are forecast to be roughly $500 million while free cash flow is expected to be more than $550 million. Adjusted earnings per share are forecast in the range of $4.00-$5.05 for 2019.

Price Performance

Chemours’ shares have rallied around 31.2% in the past three months compared with roughly 4.8% decline recorded by its industry.



Zacks Rank and Stocks to Consider

Chemours currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. KL, The Mosaic Company MOS and Israel Chemicals Ltd. ICL.

Kirkland Lake Gold has an expected earnings growth rate of 20.9% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have shot up 123% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here .

Mosaic has an expected earnings growth rate of 23.5% for the current year and carries a Zacks Rank #2 (Buy). Its shares have gained 26% in the past year.

Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2. The company’s shares have rallied 35% over the past year.

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