It has been a couple of month for the reason that final earnings report for Chemours (CC). Shares have added about 2.9% in that time-frame, outperforming the S&P 500.
Will the current constructive development proceed main as much as its subsequent earnings launch, or is Chemours due for a pullback? Earlier than we dive into how traders and analysts have reacted as of late, let’s take a fast take a look at the latest earnings report so as to get a greater deal with on the essential drivers.
Chemours’ This fall Earnings Beat, Income Miss Estimates
Chemours reported a web lack of $18 million or 12 cents per share in fourth-quarter 2023 in contrast with the year-ago quarter’s lack of $97 million or 65 cents.
Barring one-time gadgets, earnings got here in at 31 cents per share. The metric beat the Zacks Consensus Estimate of 29 cents.
Within the fourth quarter, the corporate reported web gross sales of $1,361 million, reflecting a 1.7% improve in comparison with the earlier 12 months. Nonetheless, it fell in need of the Zacks Consensus Estimate of $1,370.5 million. The expansion in gross sales was primarily attributed to a 7% rise in Titanium Applied sciences and a major 17% improve within the Thermal & Specialised Options Phase. These beneficial properties had been partially offset by a 15% decline within the Superior Efficiency Supplies unit.
Adjusted EBITDA surged by 47% 12 months over 12 months to achieve $176 million for the quarter. This improve was primarily propelled by wholesome demand throughout the Thermal & Specialised Options Phase, in addition to decrease enter prices throughout Chemours’ companies. Moreover, the implementation of the Titanium Applied sciences Transformation Plan contributed to working expense financial savings, additional enhancing the corporate’s profitability.
Phase Highlights
The Titanium Applied sciences division recorded revenues of $651 million within the quarter, marking a 7% improve in comparison with the earlier 12 months. This surpassed our estimate of $624.2 million. The rise in web gross sales was fueled by a 12% surge in quantity and a 1% forex tailwind, partially offset by a 6% decline in value. Elevated demand throughout all areas besides North America drove the amount development, whereas contractual value will increase partially mitigated value declines in market-exposed channels.
Within the Thermal & Specialised Options phase, revenues noticed a 17% year-over-year improve, reaching $374 million within the reported quarter, although it fell in need of our estimate of $440 million. The enhance in web gross sales was attributed to a ten% quantity improve, a 6% value improve, and a 1% forex tailwind. Quantity development spanned throughout the portfolio, excluding legacy refrigerant merchandise. On the similar time, value will increase had been pushed by pricing actions in legacy hydrofluorocarbons and numerous product portfolios, together with Refrigerants and Foam, Propellants, and Different Merchandise.
Revenues within the Superior Efficiency Supplies unit amounted to $325 million, marking a decline of roughly 15% 12 months over 12 months. Regardless of surpassing our estimate of $309.4 million, this decline was primarily pushed by an 18% drop in quantity, partially offset by a 2% improve in value, with a 1% forex tailwind. The lower in quantity was primarily attributed to gentle demand in APM’s Superior Supplies portfolio, which caters to economically delicate finish markets. Nonetheless, the worth improve was sustained by strong pricing in high-value finish markets inside APM’s Efficiency Options portfolio, together with superior electronics and clear vitality.
FY23 Outcomes
For the total 12 months 2023, Chemours reported web gross sales of $6,027 million, reflecting an 11% decline in comparison with the earlier 12 months. Adjusted Web Earnings stood at $425 million, a notable lower from $738 million within the prior 12 months. This resulted in an adjusted earnings per share of $2.82, down from $4.66 per share within the earlier 12 months. Adjusted EBITDA amounted to $1,014 million, in comparison with $1,361 million within the prior 12 months.
Financials
Chemours ended the quarter with money and money equivalents of $1,203 million, up round 9% 12 months over 12 months. Lengthy-term debt was $3,987 million, up practically 11% 12 months over 12 months.
Money supplied by working actions was $482 million within the reported quarter, up $321 million from the prior-year quarter.
Outlook
Within the first quarter of 2024, the corporate forecasts that consolidated web gross sales will stay comparatively secure or expertise a slight decline in comparison with the earlier quarter, whereas consolidated adjusted EBITDA is anticipated to lower by roughly 10% in contrast with fourth-quarter 2023 ranges. Working money circulate is anticipated to see an outflow of about $400 million within the quarter, primarily because of seasonal fluctuations in working capital. Compared, capital expenditures are projected to be round $100 million.
How Have Estimates Been Shifting Since Then?
It seems, estimates assessment have trended downward throughout the previous month.
The consensus estimate has shifted -19.18% because of these modifications.
VGM Scores
At present, Chemours has a terrific Progress Rating of A, although it’s lagging quite a bit on the Momentum Rating entrance with an F. Nonetheless, the inventory was allotted a grade of B on the worth facet, placing it within the prime 40% for this funding technique.
Total, the inventory has an mixture VGM Rating of A. If you happen to aren’t centered on one technique, this rating is the one you ought to be excited about.
Outlook
Estimates have been broadly trending downward for the inventory, and the magnitude of those revisions signifies a downward shift. It is no shock Chemours has a Zacks Rank #5 (Robust Promote). We count on a under common return from the inventory within the subsequent few months.
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
