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Kronos Worldwide (KRO) Beats Q3 Earnings and Sales Estimates

Kronos Worldwide, Inc. KRO recorded net income of $73.8 million or 64 cents per share in third-quarter 2017, compared with net income of $22.2 million or 19 cents a year ago. Earnings surpassed the Zacks Consensus Estimate of 45 cents. Higher average selling prices and increased sales and production volumes provided a boost to the company’s third-quarter earnings.
Net revenues jumped around 30% year over year to $464.5 million, on the back of higher titanium dioxide (TiO2) selling prices and increased sales volumes. Sales beat the Zacks Consensus Estimate of $448 million.
Kronos Worldwide Inc Price, Consensus and EPS Surprise

Kronos Worldwide Inc Price, Consensus and EPS Surprise | Kronos Worldwide Inc Quote

Volumes and Pricing

TiO2 sales volumes in the third quarter rose 4.7% year over year on increased sales in the European and North American and export markets.
TiO2 production volumes rose 2% year over year in the quarter and average TiO2 selling prices went up about 23% year over year. Prices were also 21% higher compared with the end of 2016 with increased prices recorded across all key markets.
Balance Sheet
Kronos Worldwide ended the quarter with cash and cash equivalents of $316.7 million, surging around 243.9% year over year. Long-term debt was $467.5 million, up around 39.1% year over year. Cash flows from operating activities were $218.3 million for the first nine months of 2017 compared with $68.7 million for the same period a year ago.
Kronos Worldwide expects its production volumes to be higher in 2017 on a year-over-year basis as production rates this year will be favorably impacted by the implementation of certain productivity-enhancing improvement projects at some facilities. Also, the company anticipates increased sales volume in 2017 compared to 2016.
The company also envisions income from operations in 2017 will be higher on a year-over-year basis, mainly due to an expected increase in average selling prices and the favorable impact of anticipated higher production and sales volumes in 2017.
Price Performance
Shares of Kronos Worldwide have gained 38.4% in last three months outperforming the industry’s 11.8% gain.
Zacks Rank & Other Stocks to Consider
Kronos Worldwide currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Ingevity Corporation NGVT, POSCO PKX and Westlake Chemical Corporation WLK. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity has expected long-term earnings growth of 12%.
POSCO has expected long-term earnings growth of 5%.
Westlake Chemical has expected long-term earnings growth of 8.4%.
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