Chemours (CC) Tops Earnings and Revenue Estimates in Q4

The Chemours Company CC swung to a profit of $19 million or 11 cents per share in the fourth quarter of 2020 from a loss of $317 million or $1.94 per share in the year-ago quarter.

Adjusted earnings were 61 cents per share for the quarter, which surpassed the Zacks Consensus Estimate of 36 cents.

Net sales fell around 1% year over year to $1,300 million. It beat the Zacks Consensus Estimate of $1,250.6 million. Sales for the quarter included a 2% portfolio impact from the divested MAP business.

Sales rose 8% on a sequential comparison basis as a global macroeconomic recovery led to higher sales in Titanium Technologies, Advanced Performance Materials and Chemicals Solutions units. Strong sequential volume growth was partly offset by lower global average prices.

The Chemours Company Price, Consensus and EPS Surprise

The Chemours Company Price, Consensus and EPS Surprise

The Chemours Company price-consensus-eps-surprise-chart | The Chemours Company Quote

Segment Highlights

The Titanium Technologies division raked in revenues of $691 million in the quarter, up around 13% year over year. Volumes rose 17% year over year on a demand recovery in architectural coatings, laminates and plastics markets. Global average selling prices fell 6% year over year.

Revenues in the Thermal & Specialized Solutions (formerly known as Fluoroproducts) segment fell roughly 6% year over year to $272 million in the reported quarter. Volumes were flat while prices declined 7% year over year. The company saw higher Opteon volume from sustained adoption in stationary applications and in the automotive aftermarket.

Revenues in the Advanced Performance Materials unit (formerly known as Fluoropolymers) were $279 million, down around 14% year over year. Volume fell 10% while price dropped 6% year over year. The company witnessed sustained demand weakness as a result of the pandemic. However, the impact moderated as the recovery gained momentum in its major end markets.

The Chemical Solutions unit recorded sales of $95 million, down 26% year over year. Prices and volumes fell year over year. The divesture of the MAP business led to a 21% impact on a year-over-year basis.

FY20 Results

Earnings (as reported) for full-year 2020 were $1.32 per share, compared with a loss of 32 cents per share a year ago. Revenues dropped roughly 10% year over year to $5 billion for the full year.

Financials

Chemours ended 2020 with cash and cash equivalents of $1,105 million, up roughly 17% year over year. Long-term debt was $4,005 million, down around 1% year over year.

Cash provided by operating activities was $807 million in 2020 while free cash flow was $540 million.

Outlook

Chemours expects adjusted EBITDA in the band of $1-$1.15 billion in 2021. It also sees adjusted earnings per share of between $2.40 and $3.12 for the year. Capital expenditures are forecast to be roughly $350 million in 2021. The company also expects free cash flow of more than $350 million for the year.

Price Performance

Chemours’ shares have rallied 76.4% in the past year compared with a 16.6% rise recorded by its industry.

Zacks Rank & Key Picks

Chemours currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited FSUGY, Impala Platinum Holdings Limited IMPUY and New Gold Inc. NGD.

Fortescue has a projected earnings growth rate of 78.4% for the current fiscal. The company’s shares have surged around 147% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 57% in the past year. It currently carries a Zacks Rank #1.

New Gold has a projected earnings growth rate of 733.3% for the current year. The company’s shares have shot up around 107% in a year. It currently carries a Zacks Rank #2.

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